Thursday, January 18, 2018



In our previous note, we had mentioned about the Equity Markets exhibiting a continued buoyant intent despite some signs of consolidation. While trading on analyzed lines, the Indian Equity Markets saw a tepid start to the trade on Wednesday. After initial limited downsides, the benchmark NIFTY50 saw a remarkable recovery and went on to end the day at fresh lifetime highs while posting gains of 88.10 points or 0.82%. Going into trade on Thursday, we expect this up move to continue. Speaking purely on a technical note, with the Markets ended near the day’s high on Wednesday, the up move is likely to extend itself, at least in the initial trade.

The levels of 10810 and 10850 will play out as resistance area for the Markets. Supports come in at 10750 and 10715 zones.
The Relative Strength Index – RSI on the Daily Chart is 72.2986. It shows a Bearish Divergence as the NIFTY has scaled a fresh 14-period high but RSI has not done so. Also, RSI is now in overbought territory. The Daily MACD stays bullish while trading above its signal line. A big white candle that has emerged after a brief consolidation is significant and indicate that some more up sides may be seen.
Going by the pattern analysis, after breaking out above 10490-mark, NIFTY was seen taking breather in form of some brief consolidation. It is now seen attempting to move out of that brief consolidation.
The Markets are seen attempting to move out of a brief consolidation that is created during last couple of sessions. If NIFTY confirms this then it can result into some more up move. The F&O figures continue to indicate a strong undercurrent as well. It indicates that in event of Markets facing some profit taking, it would still remain range bound and it shows no signs of any exhaustion of the uptrend. We continue to recommend making purchases with any minor profit taking dip if that is witnessed. While protecting profits at higher levels, shorts should strictly be avoided as undercurrent remains explicitly bullish.
Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK

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