Sunday, April 23, 2017

MARKET TREND FOR TUESDAY, MARCH 28, 2017

MARKET TREND FOR TUESDAY, MARCH 28, 2017

Further throwback that had started from the overbought area of the NIFTY continued in yesterday’s session as well as the benchmark NIFTY50 ended the day shedding 62.80 points or 0.69%. Today, we expect a modestly negative opening once again and negativity is likely to continue to persist for some more time. In the same breath, we would like to add that the levels of 8780-9000 will continue to act as important and major support levels for the Markets at Close. Consolidation with some amount of volatility will continue but downsides beyond the mentioned support zones looks limited.

For today, the levels of 9075 and 9130 will act as immediate resistance levels while supports will come in at 9020 and 8770 zones.

The Relative Strength Index – R SI on the Daily Chart is 57.8068 and it has reached its lowest value in last 14-days which is bearish. Also, a bearish divergence is observed as the RSI has set a fresh 14-period low while the NIFTY has not yet. The Daily MACD remains bearish while trading below its signal line.

The Open Interest in the NIFTY futures overall remained unchanged however heavy rollovers were witnessed.

The pattern analysis shows continuation of the throwback of the NIFTY post its breakout. As a part of classical throwback, the NIFTY has returned to the same area from which is has broken out. It is important to note that this has happened with lower-than-average volumes on and this is a natural phenomenon. The NIFTY is expected to take support around the current levels and then show some pullback once again.

All and all, as we approach expire, volatility is likely to increase. It is important to note that good amount of shorts exist in the system. Also, the 9000-levels large amount of put writing taking place as well. So, both of these are likely to lend support to the Markets at lower levels. We continue to reiterate to remain very light on the overall exposure. Shorts should be avoided and all dips should be continued to be used for making moderate purchases.

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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