MARKET TREND FOR FRIDAY, NOVEMBER 11, 2016
Though the equity markets continued with its up move and
closed with decent gains, as mentioned in our yesterday’s edition, the 100-DMA
of the NIFTY came into play yesterday as the NIFTY resisted at these levels and
came off from there before it ended. Today as well, we continue the NIFTY to
maintain a positive bias but the levels of 100-DMA which is 8586.40 will still
remain a critically important levels to watch out for. NIFTY is likely to
resist to this level before it gathers strength to move ahead but if it does
so, then it is likely to travel towards its logical targets of 50-DMA levels
which rests at 8690.
For today the levels of 8586 and 8635 will act as immediate
resistance levels for today. The supports come in at 8510 and 8450 levels.
The RSI—Relative Strength Index on the Daily Charts is
44.7656 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. A Rising Window occurred on the Candles. This is essentially a
gap, which usually signifies continuing up move.
On the derivative front, the NIFTY November futures have
added yet another 3.43 lakh shares or 2.06% in Open Interest. This signifies
that fresh longs continued to have been added yesterday as well.
Coming to pattern analysis, the NIFTY fully recovered its
breach and a downward breakout from the falling channel that it has formed from
8968 levels. It has remained within a narrowing falling channel but has
continued to resist at its 100-DMA as well. This level of 100-DMA which is
8586.40 will act as immediate resistance level at Close for the Markets. Though
NIFTY is very much likely to maintain a positive bias, it will consolidate
until it moves past its 100-DMA. Once these levels are breached on the upside,
logical targets towards 50-DMA levels cannot be ruled out.
All and all, we continue to reiterate our cautiously
positive view on the Markets. Caution is advised until the NIFTY moves past
100-DMA because until then, theoretically, it will remain vulnerable to profit
taking bouts from higher levels. Once these levels are moved past, we may see
the NIFTY continuing with its up move. It is advised to keep utilizing all
intermittent downsides to make selective purchases while maintain a cautious
optimism in 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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