MARKET TREND FOR FRIDAY, MARCH 10, 2017
Domestic Equity Markets put up a buoyant show ahead of the
Election outcome as the benchmark NIFTY50 saw sharp recovery in the last
90-minutes of the trade to end yet another day on a flat note gaining 2.70 points
or 0.03%. It is important to note that the Markets have been consolidating near
the Double Top resistance levels for nearly a week now. It is very much clear
that given the importance of the currently election on the present set of
on-going reforms and its acting as a precursor to the 2019 elections, the NIFTY
has virtually de-coupled and posed very strong resilience to the sharp spike in
the US Bond Yields and has also so far digested the fact of the nearly-imminent
interest rate hike on March 15th. Today, we expect a positive
opening to the Markets and expect some decisive moves on the future momentum of
the Markets. Even if the Market discounts, we cannot discount the extended
week-end and given the election results, some amount of caution might also
creep in leading to some volatility as well.
For today, the levels of 8950 and 9035 will remain potential
resistance levels for the Markets. The supports come in at 8835 and 8770
levels.
The Relative Strength Index – RSI on the Daily Chart is
63.7532 and it remains neutral and shows no failure swings or any divergence as
against the price. The Daily MACD remains bearish trading below the signal line
but the trajectory has flattened and a positive crossover is expected if the
NIFTY maintains its present ground. No significant formations are seen on
Candles.
The NIFTY March futures have further went on to add over
5.88 lakh shares or 2.65% in Open Interest. This very clearly indicates a
bullish set up as the addition has come in while the NIFTY recovered from the
low point of the day.
The pattern analysis indicates bullish inclination of the
Markets. After testing the Double Top resistance zone of 8930-8950 zones, the
NIFTY has been deliberating around these levels in a capped range for nearly a
week now. This, if read singularly, indicates
buoyant set up as instead of correction and showing some retracement,
the NIFTY is moving sideways and forming a congestion zone, which usually
translates into continuation of the present trend. A decisive up move shall occur
if the NIFTY manages to move past and close above 8960-levels comprehensively.
Overall, much of the set-up in the Markets revolves around
expectations and not actual results of the Election, and such set-ups can often act as double edged
sword. The way the NIFTY has till now showed exemplary resilience to global
technical factors like sharp spike in the US Bond yields and has digested the
near imminent rate hike in the US on March 15th, any slightest of
the negative outcome on the domestic front may see the Markets reacting
more-than-necessary leading very volatile knee-jerk reactions. Given such fact,
we have to live with the present buoyant set up and can expect the buoyancy to
continue next week.
However, throwing caution to the wind is not advised and
remaining cautiously optimistic is something that is advised for the day.
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
