MARKET OUTLOOK FOR FRIDAY, JULY 07, 2017
In our previous note, we had mentioned about the
possibilities of the Markets testing 9700-mark. In line with this analysis, the
NIFTY tested these levels while ending the day with net gains of 36.95 points
or 0.38%. In the process of testing the 9700-mark, NIFTY also reacted from
these levels as these happen to be a pattern area resistance for the Markets.
On Friday, we expect a tepid start and also expect the Markets into some consolidation once
again and see minor corrective activities.
Friday will see the levels of 9680 and 9710 playing out as
important resistance levels. Supports will come in at 9630 and 9585 zones.
The Relative Strength Index – RSI on the Daily Chart is
62.2610. A bearish divergence is observed on NIFTY as the NIFTY has marked a
fresh 14-period high while the RSI did not. Daily MACD continues to remain
bearish while trading below its signal line.
Pattern analysis clearly suggests that the Markets will
continue to face pattern resistance in the 9700-9735 zones in coming days. The
Markets had breached a rising trend line on the downside and while on its move
up, this very trend line is now acting out as resistance. Given the rising
nature of this trend line, NIFTY will find it difficult to post a clear
breakout soon.
Overall, some signs are evident on the Charts that suggest
that the momentum in NIFTY is likely to taper down. Markets remain overbought
on Stochastic, while showing a bearish divergence on the lead indicator.
F&O data also suggest some minor consolidation of profit taking may occur
though select outperformance in stock will continue. It is advised to
vigilantly protect profits at current 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
