MARKET TREND FOR FRIDAY, NOVEMBER 18, 2016
The Indian Equities continued to remain “oversold” and once
again traded much on analyzed lines. We had mentioned that there are chances of
NIFTY continuing to remain oversold and still remain under pressure. The NIFTY
ended yesterday with a modest loss and continued to trade below its 200-DMA as
well. Today, we continue to keep our analysis on similar lines. Though we may
witness a stable opening, the session will remain weighed down by domestic issues
and the levels of 8070 will remain critical point to watch at Close levels.
For today, the levels of 8151 and 8195 will act as immediate
resistance levels while supports will come in at 8070 and 8005 levels.
The RSI—Relative Strength Index on the Daily Chart is
26.7502 it has reached its lowest value in last 14-days which is bearish. It
does not show any bullish or bearish divergence and it remains very much in
“oversold “zone. The Daily MACD stays bearish as it trades below its signal
line. On Candles, a long upper shadow
occurred. It is important to note that this is not a classical long upper
shadow as current upper shadow is little shorter than what is required, it can
leads to potential bottom formation. But once again, it significant diminishes
a bit as it is more effective trend reversal signal when it occurs during an
uptrend which is not the present case.
On the derivative front, the NIFTY November futures have
shed 99,600 or just 0.53% in Open Interest. This figure remains unchanged and
therefore no significant creation of shorts or short covering was observed at
current levels.
Coming to pattern analysis, the NIFTY has given a downward
breakout from a falling channel drawn from 8968 levels. It is now important to
note that post the negative breakout on the downside from the falling channel,
the NIFTY has completed the measuring implications that arise from such
negative breakout. Further to this, it continues to trade a notch below its
200-DMA but still remains within its 1% filter and at the same time remains
heavily oversold.
All and all, given the oversold nature of the Markets and
given the fact that the NIFTY PCR stands below 0.75 chances of a technical
pullback cannot be ruled out even if we continue to remain in a continuing
downtrend. However, as mentioned in the beginning, the session may still remain
weighed down by domestic issues and we might see some volatile selling bouts
but downsides will also remain protected. Overall continuance of a cautious
approach with preservation of cash is advised for 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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.