MARKET OUTLOOK FOR WEDNESDAY, OCT 11, 2017
The Indian Equity markets continued to extend its gains and ended
above the 10k mark but the session continued to remain capped and in a narrow
range. The benchmark NIFTY50 ended the Tuesday’s trade with modest gains of 28.20
points or 0.28%. We may continue to expect a quiet start to Wednesday’s trade
but the increasingly narrow intraday bands and lowest value of VIX in recent
times warrants a caution at higher levels. Though there are no imminent signs
of any danger, we are now required to treat each up move with more and more
focus on protecting profits and creating defensive bets.
The levels of 10040 and 10085 are likely to act as immediate
resistance levels for Wednesday. Supports come in at 9945 and then at 9910
zones.
The Relative Strength Index – RSI on the Daily Chart is 56.1949
and it continues to stay neutral. The Daily MACD has reported a positive
crossover and it now bullish trading above its signal line. A Spinning Top
occurred on Candles. It is typically a session with a small intraday band and
often signals continued sense of indecision among Market participants.
The pattern analysis show that the NIFTY has once again entered
back into the upward rising channel that it has been trading in. Now, with the
levels of 50-DMA as its immediate support, we can expect the Markets to
consolidate and trade in a range.
Overall, we still maintain that the undercurrent remains strong
and the Markets have shown no signs of any reversal. However, some couple of
factors warrant our short term attention. VIX is at its lowest in recent times.
Further a spinning top has emerged after a Doji indicating continued existence of
narrow intraday bands which often results out of continued indecisiveness of
Market Participants. All these point towards likely bouts of profit taking at
higher levels. At least, some increased volatility in coming days cannot be
ruled out. We recommend protecting profits at each higher level and maintain a
cautious outlook for the day.
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
+91- 70164-32277
/ +91-98250-16331
