Tuesday, January 16, 2018



Indian Equity Markets had a robust start to the Week as the benchmark NIFTY opened higher on expected lines. It scaled yet another fresh peak and though it came off slightly from the high point of the day, still posted gains of 60.30 points or 0.56%. Markets have not officially confirmed its breakout from the 10490-mark and has placed itself into unchartered territory. We expect yet another modestly positive start to the Markets. However, going into trade on Tuesday, we cannot ignore the fact that the Markets are now overbought and may face stiff overhead resistance in the 10800-10850 zones while it tests the 24-month long upward rising trend line on the Weekly Charts.
The levels of 10780 and 10825 will play out as immediate resistance area while the supports will come in at 10690 and 10610 zones.
The Relative Strength Index – RSI on the Daily Chart is 72.9336 and it has marked a fresh 14-period high which is bullish. Daily MACD stays bullish while trading above its signal line. On the Candles, a Rising Window occurred. Normally this would imply continuation of uptrend. However, in the present context of the Markets being overbought in nature, might have to make extra efforts for the continuation of up move.
The pattern analysis shows the NIFTY comfortably cruising ahead after a breakout from the 10490-mark and further up after a brief breather and consolidation in between. It is clearly seen inching higher towards its overhead resistance area which falls near the 10800—10850 mark.
Overall, the structure of the Chart and the F&O data point towards likely continuation of up move, we cannot ignore the overbought nature of the Markets. This may result into some volatile profit taking bouts from higher levels. However, as of now, the intent of the Markets remain remarkably buoyant. Though there is some more steam left in the Markets to inch higher, we recommend making select purchases. However, this should be done with extreme caution and with very vigilant protection of profits at higher levels.

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 

+91- 70164-32277  /  +91-98250-16331  

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