MARKET TREND FOR TUESDAY, MARCH 14, 2017
Today, the Markets shall open after an extended weekend as
Monday was a trading holiday on account of Holi. The Weekend, however, was
extremely eventful and today, we see a imminent gap-up opening in the Indian
Equities as NIFTY shall very buoyantly react to the UP Election outcome on
Saturday wherein the BJP made a clean sweep achieving absolutely majority. We
had often mentioned number of times in the previous notes that the NIFTY has
been consolidating with an upward inclination and bias. It had not only digested
the near-imminent US Interest rate hike this March but instead prepared itself
for an upward breakout at an appropriate time. Today, NIFTY will see a gap up
opening taking cues from the election outcome. This election outcome gifting
the ruling party an absolute majority will give a huge impetus to the reforms
as it will positively alter the equations in the Upper House and make passage
of important bills much easier. We will see NIFTY giving a thumbs-up to this
and make a long expected and awaited very decisive breakout scaling fresh
lifetime highs.
Speaking purely on technical grounds, the levels of 9065 and
9120 will act as immediate resistance levels for today. However, the highs that
the NIFTY may form may go beyond these mentioned levels.
The Relative Strength Index – RSI on the Daily Chart is
64.3720 and this remains neutral showing no bullish or bearish divergence or
failure swings. The Daily MACD still continue to remain bearish while trading
above its signal line. No significant major formation is observed on Candles.
The NIFTY March futures had ended the day adding yet another
5.96 lakh shares or 2.62% and it had continued to show bullish build up in the
NIFTY.
The pattern analysis now shows two things very clearly. The
Circled area on the Charts was the likely area wherein the Markets were
expected to consolidate. As evident from the Charts, it did consolidate in the
marked area while showing upward bias. The area was a major Double Top Resistance
area on the Daily Charts and any upward breach would have meant a decisive
breakout for the NIFTY. Today, with a big gap up opening expected, the NIFTY
will, in all likelihood, achieve this decisive breakout.
All and all, beyond all usual analysis, a gap up opening is
imminent and we will see the session remaining range bound post gap up opening.
Any serious profit booking at higher levels is not expected to soon and we
might see the NIFTY trending in sideways trajectory post all-likely gap up
opening. Importantly, all the sectors getting positively affected by the
pending bills and contributing to faster reforms will be chased in frenzied
manner. Overall, we advice to book any profit that is significant and make
fresh allocation to sectors expected to gain directly from the development that
happened over the weekend. Effective sector rotation is advised.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
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