Sunday, May 21, 2017

MARKET OUTLOOK FOR THURSDAY, MAY 18, 2017

MARKET OUTLOOK FOR THURSDAY, MAY 18, 2017
The Indian Equity Markets continued to end yet another day with gains but the gains remained very modest to the extent of 13.50 points or 0.14%. The benchmark has continued to trade the upper Bollinger Band and has once again shown enough signs that some amount of minor corrective action remains inevitable even if it remains in extremely limited proportion. On Thursday, we expect a flat to modestly negative opening and the Markets may see some minor corrective action along with some sector-specific outperformance.

The levels of 9530 and 9565 will remain likely resistance levels. Supports appear much lower at 9460 and 9410 zones.

The Relative Strength Index on the Daily Chart is 72.6752 and it remains clearly in overbought territory. The Daily MACD remains bullish while trading above its signal line. 

On the Candles, a Long Lower Shadow occurred. Tough this is not a classical hammer as it contains a small upper body, it has potential to temporarily halt the up move. Also, a spinning top formation on the Candle along with this may cause further temporary halt in the up move.

The pattern analysis very clearly suggests the Markets trading the upper trend line drawn from 9180-9220 zones. As we had mentioned in one of our previous notes, the rising nature of the trend line raises the daily resistance levels for the Markets every day and prohibits the 
Markets from giving a clear breakout.

All and all, there are signs enough that Markets are overdue to take a breather. Again, the downsides may remain limited but some minor corrective activity in overdue and imminent. We recommend keeping exposure to very moderate levels and lay emphasis on vigilant protection of profits at higher levels.

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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