MARKET OUTLOOK FOR MONDAY, JULY 31, 2017
The Markets on Friday remained under significant corrective
pressure for most part of the day but the last hour and a half saw a sharp
rebound with the benchmark NIFTY50 ended the day nearly flat losing just 6.05
points or 0.06%. Monday is likely to see a modest start to the Markets. The
indicators suggest a conflicting reading. There are chances that the Markets
may continue to attempt some up move but at the same time, it has exposed
itself even more to the vulnerability of a sharp profit taking bouts. Traders
will find it even harder to chase momentum at higher levels.
The levels of 10100 and 10160 are likely to work out as
immediate resistance levels for the Markets. Supports will come in lower at
9960 and 9875 zones.
The Relative Strength Index—RSI on the Daily Chart is
72.7151 and remain neutral showing no divergences against the price. The Daily
MACD stays bullish while trading above its signal line. On Candles, a hanging
man occurred. Though this is not a classical hanging man pattern, but its
occurring during an up move is likely to make life difficult for NIFTY at
higher levels.
Overall, it is beyond doubt that the overall long term trend
remains intact. Short term outlook also looks buoyant. However, we need to
focus on the fact that Daily and Weekly Charts remain much overbought and the
F&O data suggest that volatility is likely to remain ingrained in the
Markets for coming some time. Though short term trades may continue to chase
the momentum, it also makes necessary for short term market participants to
remain extremely vigilant at higher levels by continuing to place protective
stops while chasing momentum.
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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