MARKET OUTLOOK FOR TUESDAY, JULY 25, 2017
Markets witnessed a sustained up move on Monday as the
benchmark NIFTY50 scaled fresh highs and ended with decent gains of 51.15
points or 0.52%. The Markets have ended within a kissing distance of the
10,000-mark. We expect a positive opening tomorrow but it is beyond doubts that
the Markets are heading towards a imminent corrective action. We do not see any
significant retracement from current levels but we certainly expect some amount
of profit taking coming in around 10,000 mark even if it remains short lived.
The levels of 10025 and 10090 will act as potential
resistance levels for the Markets. Supports come in much lower at 9920 and 9865
levels.
The Relative Strength Index – RSI on the Daily Chart is
70.8978 and now trades in overbought zone. The NIFTY has set a fresh 14-period
high while the RSI has not and this has resulted into Bearish Divergence on the
Charts. The Daily MACD stays bullish while trading above its signal line.
Overall, the levels that the NIFTY currently trades at are
very near to 10,000 mark. It may not be any surprise if the Markets tests those
levels but moving past those levels will not be a cake-walk for the Markets.
Given the F&O data, the present structure of the Charts and further given
the overbought nature of the lead indicators coupled with a bearish divergence,
some profit taking bouts cannot be ruled out. We reiterate extremely caution to
the short term traders and recommend not getting carried away with the up move
and continue to vigilantly protect positions at higher levels.
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
