MARKET TREND FOR FRIDAY, NOVEMBER 04, 2016
The Markets had a lackluster session as it gave up in the
last hour of the trade to end the day with minor losses. Today as well, the
NIFTY continues to hang in precarious balance. Yesterday, the NIFTY ended up
taking support at the lower line (return line) of the falling channel that it
has formed. Having said this, today, we can expect a lower opening and this is
all likely to cause the NIFTY to open outside the falling channel raising
possibilities of a downward break down. However, it would be important to see
if the NIFTY improves as the day progresses and comes back inside the trading range
of the falling channel.
For today, the levels of 8520 and 8555 will act as immediate
resistance levels for the day. The supports come in at 8450 and 8420 levels on
the downside.
The RSI—Relative Strength Index on the Daily Chart is
35.4053 and it has reached its lowest value in last 14-days which is bearish.
It does not show any bullish or bearish divergence. The Daily MACD remains
bearish as it trades below its signal line.
On the derivative front, the NIFTY November futures have
shed yet another over 1.72 lakh shares or 1% in Open Interest. The NIFTY PCR
stands at 0.93 as against 0.95.
Coming to pattern analysis, the NIFTY has taken support as
of now on the lower line (return line) of the falling channel that it has
formed from 8968 levels. Any breach of this return line will cause the NIFTY to
get weaker in the near term. Today’s likely lower opening will see the Markets
opening outside this falling channel and this obviously is a reason to worry
for the Markets. It would be critically important to see if there is some
improvement as the day progresses in the second half of the session and the
NIFTY crawls back into the trading range.
All and all, we sound high levels of caution in the Markets
today. It is advised to refrain from taking any fresh positions at any side and
maintain liquidity to hold and protect existing positions. At any levels, wherever
possible, exposures should be curtailed. The reaction to the European Markets too
will be important to watch in the second half. The NIFTY will also react to the
GST rates that got finalized yesterday. Overall, very cautious outlook is
advised on the Markets today.
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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