MARKET TREND FOR WEDNESDAY, NOVEMBER 09, 2016
After spending nearly entire session in a very narrow range,
the NIFTY ended near high point of the day yesterday while last hour witnessed
a sharp up move. Today, as we open, we will see the Markets trading somewhat
beyond technicals. Today, while we see bracing ourselves preparing to react to
one of the most important international event, Markets are bound to remain
volatile and extremely choppy and might witness a gap. By the time the session
starts, world will have clear picture of the most likely US Election outcome.
Though technical indicators and levels might not hold strictly correct, it
might still provide some guidelines on either side as we go into the session.
Today, the levels of 8610 and 8695 will act as immediate
major resistance in case if we see any gap up. On the other side, in event of
any untoward developments, the 8400 and 8350 will provide important supports.
Under normal trade, 8480-8500 mark will provide normal support to the Markets.
The RSI—Relative Strength Index on the Daily Chart is
43.7367 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD still remains neutral as it trades below its
signal line. A Long Lower Shadow has occurred on the Candles showing
possible upsides in case of no untoward developments in the US.
On the derivative front, the NIFTY November futures have
shed 57,300 shares or 0.36% in Open Interest. This figure is negligible as no
major shorts or longs have been added.
Coming to pattern analysis, NIFTY will see a negative breach
from the falling channel if it drops below 8480-mark and well below that. On
the higher side, the levels of 8680-8715 continue to remain resistance as NIFTY
faces important pattern resistance and 50-DMA as well in that zone. In either case,
we are set to see extensive amount of volatility while we go into the trade
reacting to the developments in the US.
All and all, we continue to advice to refrain from creating
aggressive shorts as good amount of shorts exists in the system. More amounts
of cash should be preserved and aggressive exposure should be avoided until we
get clear directional bias. Irrespective of the outcome in the US, it would be
important to note that give the technical structure of the Markets, except for
some knee jerk reactions in coming days, Markets are not likely to deviate much
from the overall broad technical indicators.
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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