MARKET TREND FOR MONDAY, JANUARY 02, 2017
Equity Markets continued its uptick on Friday as the NIFTY
posted yet another day of gains and ended the last trading day of the year 2016
with gains of 82.20 points or 1.01%. On Year-to-date basis, the NIFTY ended
2016 with net gains of 239.45 points or 3.01% grossly under-performing its
peers. Today, as we enter into the first trading day of 2017, we can once again
expect a stable start to the Markets. We may see some positive trade, at least
in the initial session and going ahead, today and in sessions to come, the
levels of 8260 will remain extremely critical to watch out for. This is the
place where in the NIFTY meets multiple pattern resistances. We can certainly
expect some consolidation at around these levels.
For today, the levels of 8230 and 8260 will act as immediate
resistance for the Markets. Supports will come in at 8145 and 8100 levels.
The RSI—Relative Strength Index on the Daily Chart is
53.75.63 and it has reached its highest value in last 14-days which is Bullish.
Also, RSI has set a fresh 14-period high whereas the NIFTY has not yet and this
indicates Bullish Divergence. The Daily MACD is bullish as it trades above its
signal line. On the Candles, a Rising Window occurred. It is a gap on
the upper side and this signals potential continuation of the uptrend.
On the derivative front, the NIFTY January futures have
added yet another 9.64 lakh shares or 5.97% in Open Interest.
Coming to pattern analysis, the NIFTY has re-established the
7900-7920 zones as its important pattern support. After bouncing off from those
lows, the NIFTY took support once again forming a Double Bottom formation. It
validated this formation as it bounced back nearly 300-odd points from there.
As of now, this level now reinforces itself as its important pattern support. We
expect the NIFTY to logically move towards 200-DMA which rests at 8260 today.
Overall, while not ignoring the fact that the NIFTY has seen
some 300-odd points of rise in last four sessions, some possibilities of
consolidation happening at higher levels certainly exists. However, the other
factors, such as the F&O data, the lead indicators and its structure and
the overall pattern analysis indicate continuation of uptrend. So, whatever
consolidation that we may see going ahead, will be expected to be in form
intermittent profit taking bouts. We continue to maintain positive outlook on
the Markets.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
+91-98250-16331
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