MARKET TREND FOR TUESDAY, NOVEMBER 29, 2016
Though the Indian Equities recovered from its initial lows, it
ended the day with modest gains while testing its 200-DMA intraday. Today, the
analysis continues to remain more or less on similar lines. We might see
subdued opening and the NIFTY will continue to resist to 200-DMA which is 8154
at Close levels and therefore, the behavior of NIFTY vis-à-vis this level of
200-DMA will be critical to watch out for. It would be critically important for
the NIFTY to move past the 200-DMA and stay above that to mark and confirm
reversal on the Chart.
For today, the levels of 8154 and 8230 will act as immediate
resistance levels for today. The supports come in at 8050 and 7975 levels.
The
RSI—Relative Strength Index on the Daily Chart is 39.9830 and it remains neutral
as it shows no bullish or bearish divergence or any failure swings. The Daily
MACDcontinues to remain bearish as it trades below its signal line. If no major
downsides are seen and if we see some ranged consolidation, this indicator is
moving towards reporting a positive crossover.
On
derivative front, the NIFTY December futures have added over 6.04 lakh shares
or 4.28% in Open Interest. This now vindicates our reading that short covering
that was seen on Friday need to be replaced with fresh longs and this is what
is been seen the Markets.
Coming to
pattern analysis, the NIFTY has continued to show minor up tick after it formed
a higher bottom on the Daily Close Charts. However, it still rules below
200-DMA and this level will continue to act as resistance at Close levels. Not
only this, even if the NIFTY continues to trade with positive bias, this level
is likely to cause the Markets to consolidate in a broad range. However, with
all likelihood, the NIFTY has formed a near term bottom.
Overall,
we continue to reiterate to avoid fresh shorts and utilize dips to make select
purchases. In all likelihood, the NIFTY may consolidate in a broad range and is
likely to trade with positive bias. However, for a pullback to sustain the
NIFTY will have to move past 200-DMA and trade above that at close levels.
Overall, while downsides may be utilized to make select purchases, IT and
select Mid Caps will continue to outperform. Overall, volatility may remain but
positive consolidation can be expected with upward bias.
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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