MARKET TREND FOR TUESDAY, MARCH 28, 2017
Further throwback that had started from the overbought area
of the NIFTY continued in yesterday’s session as well as the benchmark NIFTY50
ended the day shedding 62.80 points or 0.69%. Today, we expect a modestly
negative opening once again and negativity is likely to continue to persist for
some more time. In the same breath, we would like to add that the levels of
8780-9000 will continue to act as important and major support levels for the
Markets at Close. Consolidation with some amount of volatility will continue
but downsides beyond the mentioned support zones looks limited.
For today, the levels of 9075 and 9130 will act as immediate
resistance levels while supports will come in at 9020 and 8770 zones.
The Relative Strength Index – R SI on the Daily Chart is
57.8068 and it has reached its lowest value in last 14-days which is bearish.
Also, a bearish divergence is observed as the RSI has set a fresh 14-period low
while the NIFTY has not yet. The Daily MACD remains bearish while trading below
its signal line.
The Open Interest in the NIFTY futures overall remained
unchanged however heavy rollovers were witnessed.
The pattern analysis shows continuation of the throwback of
the NIFTY post its breakout. As a part of classical throwback, the NIFTY has
returned to the same area from which is has broken out. It is important to note
that this has happened with lower-than-average volumes on and this is a natural
phenomenon. The NIFTY is expected to take support around the current levels and
then show some pullback once again.
All and all, as we approach expire, volatility is likely to
increase. It is important to note that good amount of shorts exist in the
system. Also, the 9000-levels large amount of put writing taking place as well.
So, both of these are likely to lend support to the Markets at lower levels. We
continue to reiterate to remain very light on the overall exposure. Shorts
should be avoided and all dips should be continued to be used for making moderate
purchases.
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
