MARKET TREND FOR FRIDAY, NOVEMBER 25, 2016
Very much on expected lines, the second half of the session
yesterday saw good amount of volatility in the Equity Markets as the NIFTY once
again ended in the red after 60-point swing in the either side and taking the
NIFTY once again in the “oversold” territory. Failure of the NIFTY to sustain
above 8020-8040 spelled expected weakness as well. Today, though we might see
some stable opening, the possibility of the NIFTY tracking the lower band of
the Bollinger Band cannot be ruled out and some volatility coupled with some
weakness on week-on-week basis can also persist and the zones of 8020-8040 will
be critical levels to watch out for.
For today, the levels of 8010 and 8045 will act as immediate
resistance levels while the supports come in at 7915 and 7855 levels.
The RSI—Relative Strength Index on the Daily Chart is
28.5914 and it is neutral as RSI does not show any bullish or bearish
divergence or any failure swings. It now currently rules once again in “oversold”
territory. Daily MACD is bearish as it trades below its signal line.
Coming to pattern analysis, the NIFTY once again moved towards
testing its recent lows of 7916 though it is currently trading above it. The
NIFTY has lost more than what is involved in its measuring implications after
breaking on the downside from a falling channel formation after it made its
recent highs of 8968. While on its way down, the NIFTY has also breached its 200-DMA which is 8146 and
this level is expected to act as resistance while the NIFT attempts to form a
base and pullback.
Given the oversold nature of the Markets, we may again expect some
possibilities of a technical pullback even while we continue to remain in a
downtrend. It is very much likely that the downsides in the Markets remain
limited and we see NIFTY trading in broad trading range and consolidate. The
Bollinger Bands which are 114% wider than normal indicate periods of high
volatility. Given that the bands have been wider since last 7 periods,
probability of prices consolidating into a less volatile trading range
increases the longer the bands remain in this wide range. In view of this, we
continue to advice to refrain from creating short positions and continue to
accumulate quality stocks at each lower level.
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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