MARKET TREND FOR FRIDAY, OCTOBER 28, 2016
The Markets saw a remarkable recovery from lower levels and
ended flat but it traded very much on expected lines and went on to test its
100-DMA levels. The 100-DMA levels were the levels from where the NIFTY saw
sharp recovery coming in. Today, we can expect the lower opening in the Markets
but resilience round 100-DMA would be very much evident and there are good
amount of chances that we see up moves post lower opening and good amount of
support around the 100-DMA level which is 8552.
Today, the levels of 8660 and 8695 will act as immediate
resistance levels for the Markets. The supports come in at 8550 and 8515
levels.
The RSI—Relative Strength Index on the Daily Chart is
44.4632 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD stays bearish as it trades below its signal
line after reporting a negative crossover. On the Candles, a long lower
shadow occurred. It is a hammer-like formation but with a small real body
above. If this occurs after a decline, it can mark a potential reversal.
However, a confirmation is required on the other day.
Coming to pattern analysis, the NIFTY has still continued to
remain in the falling channel drawn from 8968 levels. However, it has attempted
to take support at the 100-DMA levels which is 8552 today. In event of
declines, this level will continue to act as major support at
Close levels.
Any breach below this will cause NIFTY
to get weaker. On the upper side, the levels of 8690-8720 continue to act as
sacrosanct resistance levels for the Markets.
All and all, the Markets still do not seem out of the woods
completely and so long as they remain in this falling channel, it will continue
to trade in a broad trading range while also continuing to remain vulnerable to
selling pressures from above. However, today, we might see some improvement
after expected negative opening but we advise to keep exposures limited to
select quality stocks and maintain liquidity while adopting a cautious view on
the Markets.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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