MARKET OUTLOOK FOR THURSDAY, FEB 15, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 15, 2018

Indian Equity Markets took a hard sentimental hit in the last hour of the trade. The benchmark NIFTY50 traded in a limited range all throughout the session on Wednesday but the last hour saw it lose ground rapidly. Though, post settlement, it ended the day with just a modest loss of 38.85 points or 0.37%. While we go into trade on Thursday, there are couple of things that will be important.

The vulnerability of NIFTY around the support zone of 10480-10500 level is a cause of worry for the Markets. We expect a quiet start to the Thursday’s session but the opening levels and the behavior of the Markets vis-à-vis the 10500-mark will be important to watch for. Any significant breach of the support zone of 10480-10500 at Close levels will increase the possibility of the Markets testing its 100-DMA once again.

The Relative Strength Index – RSI on the Daily Chart is 40.3059. It stays neutral showing no divergence against the price. The Daily MACD stays bearish while trading below its signal line however it continues narrowing its trajectory.  An Engulfing Bearish candle has emerged. Since this has occurred during a downtrend, this has significance. It means that this can be a last engulfing candle and indicates a potential bottom formation.

While having a look at pattern analysis, it appears that NIFTY is struggling hard to form a base after forming a recent low of 10276 and there are high probabilities that this low will not be violated and the 100-DMA will remain defended at close levels in event of weakness, if any.

All in all, we expect a quiet start and the behavior of the Markets vis-à-vis 10500-mark will be crucially important. There are high probabilities that despite any short term hiccups, the recent lows are not likely to be violated. We continue to recommend utilizing dips in making purchases as sector-specific outperformance will remain evident. However, given the current volatility persisting in the Markets, we also recommend keeping overall exposures at modest 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 
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