MARKET OUTLOOK
FOR TUESDAY, OCT 31, 2017
The Indian Equity Markets continued to pile some more gains as the
benchmark NIFTY50 ended the day on Monday gaining 40.60 points or 0.39%. Very much
on expected line, the Markets are giving marginal highs and putting on gains on
end-of-day basis. However, we also need to take on account the fact that the
intraday bands are once again getting much narrow. Going into trade on Tuesday,
we can expect a modestly positive start to the trade. However, there are some
minor signs of Distribution taking place are appearing which we need to look at
with some caution.
The levels of 10390 and 10430 will play out as immediate
resistance area for the Markets. Supports come in lower at 10310 and 10235
zones.
The Relative Strength Index – RSI on the Daily Chart is 69.6210.
It has continued to show Bearish Divergence once again as while NIFTY made a
fresh 14-period high, the RSI did not. The Daily MACD is bullish as it trades
above its signal line but over previous days, it has flattened its trajectory.
The pattern analysis show that the NIFTY has successfully
attempted to breakout from a broad rectangular formation trading range that it
has formed over past couple of weeks. However, the breakout is likely see
itself losing steam forcing the Markets to likely consolidation at higher
levels.
All and all, NIFTY may still continue to pile up some more gains
but at the same time, we just cannot and should not ignore the persistent
bearish divergences that thrown by the lead indicators on the Charts. These are
enough warning signals that the higher levels in the NIFTY could also mean some
loss of momentum and some forced corrective consolidation as well. While
remaining highly stock specific, cautious outlook is advised 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
