MARKET OUTLOOK FOR TUESDAY, NOVEMBER 15, 2016
The NIFTY ended the session on Friday with a deep cut and
gave back nearly a third of its prior two day’s recover, it still showed
continued negative ending on closing basis. Today, we can expect some stability
to return to the Markets. Opening is expected to be quiet and though we may see
intraday volatility, the downsides to the remains limited any dips will remain
open to improvement as we go ahead in the session. The levels of 8460 will
remain important pattern resistance for the Markets to watch for.
For today, the levels of 8375 and 8460 will act as immediate
resistance levels for the Markets. The supports come in at 8275 and 8240
levels.
The RSI—Relative Strength Index on the Daily Chart is 33.5323
and it does not show any failure swing. The NIFTY has set a fresh 14-period low
on Closing basis but RSI has not and this has formed a Bullish Divergence on
the Daily Charts. The Daily MACD stays remains bearish as it trades below its
signal line. On the Candles, a formation akin to abandoned baby has
formed. However, this would be less effective and damaging as it has not
occurred after a rally and has occurred during a downtrend.
On the derivative front, the NIFTY November future have
added over 4.93 lakh shares or 2.90% in Open Interest. This signifies that
fresh shorts have been added as the decline has come along with addition in
Open Interest.
Coming to pattern analysis, it is evident that the NIFTY has
given a downward breakout from the falling channel formed since 8968 levels.
The return line (Support line or the Lower Line) of that channel which was
acting as support will now act as its resistance on NIFTY’s way up. That level
is 8460 today as is declining. Having said this, it is also important to note
that the NIFTY is near its pattern support on its Closing Charts and downsides
from current levels remain very limited.
All and all, even if we continue to remain in continuing downtrend, there are
high possibilities of a technical pullback in today’s session or in sessions to
come. It is reiterated to continue to use all downsides to make select stock
specific purchases. Shorts should be avoided as short trap may occur. Overall,
which maintaining a cautious view on the Markets, optimistic outlook 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.