MARKET OUTLOOK FOR MONDAY, OCT 16,
2017
Indian Equities continued to enjoy yet another
buoyant session on Friday as the benchmark NIFTY50 marked yet another lifetime
high at 10191.90 and ended the day with net gains of 71.05 points or 0.70%.
Monday and coming days remain critical for the Markets as the undercurrent
remains buoyant but at the same time, the behavior of the Markets vis-à-vis the
levels of 10200 will be critical to watch out for. Despite buoyant
undercurrent, NIFTY has yet to show a clear and convincing breakout from the
broad rectangle trading pattern that is formed.
The levels of 10200 and 10265 will act as
immediate resistance area for the Markets. Supports come in much lower at 10110
and 10035 levels.
The Relative Strength Index – RSI on the Daily
Chart is 64.4602 and it has marked a fresh 14-period high which is bullish. RSI
does not show any divergence against the price. The Daily MACD stays bullish
while trading above its signal line. A rising window occurred on Candles. This
is essentially a gap which usually implies continuation of up move. However,
given the overbought nature of certain lead indicators, this will require
confirmation on the next trading day.
While having a look at pattern analysis, NIFTY
has tested the upper trend line of the rectangle trading range that has evolved
over last couple of weeks. In a way, we can say that it has encountered a
Triple Top resistance area and it is now attempting to move past it for a
breakout.
As mentioned earlier, despite buoyant set up,
we still continue to approach the Markets with extreme dose of caution. It may
continue to scale marginal highs driven by massive liquidity and sentimental
push but it may so happen that a sustainable and convincing breakout may still
continue to remain elusive. The factors like very high (above 1.50) levels of
PCR (Nifty Put to Call Ratio), bearish divergences on the Weekly Charts,
fatigue in some of the lead indicators still forces us to approach the Markets
with extreme cautions. Momentum may be chased but with very high degree of
alertness at higher levels.
Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research
Analyst, SEBI Reg. No. INH000003341)
Member:
CMT Association (Formerly known as Market
Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA),
CANADA
Society of Technical Analysts (STA),
UK
+91- 70164-32277
/ +91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.