MARKET TREND FOR THURSDAY, JANUARY 05, 2017
Classical consolidation continued in the Indian Equities as
the NIFTY remained in a very narrow range and ended the third day in a row on a
flat note. It ended with marginal loss of 1.5 points or 0.02%. Today’s session
is likely to remain on similar lines. We are likely to see a modestly positive
start to the Markets and the analysis for today, therefore, remains on similar
lines. The NIFTY has been resisting to its 50-DMA. Therefore, 50-DMA which
stands at 8216 and 200-DMA which stands at 8271 remain critical levels to watch
for in coming days.
For today, the levels of 8220 and 8270 will remain
resistance levels for the NIFTY. The supports are likely to come in at 8135 and
8105 levels.
The RSI—Relative Strength Index on the Daily Chart is
54.0082 and this remains neutral as no bullish or bearish divergence are seen.
It does not show any failure swings either. The Daily MACD is bullish as it
trades above its signal line. On the Candles, no significant formations are
seen.
On the derivative front, the NIFTY has added yet another
2.99 lakh shares or 1.74% in Open Interest. While the NIFTY is consolidating,
it is adding net OI which is a positive sign.
The pattern analysis suggest a clear formation of the trading
range post the Markets taking support in the 7900-7920 zones. It took support
twice near these levels forming a Double
Bottom support and it now trades
currently on the higher side of the established trading range. As of now, it
trades below its 50-DMA and 200-DMA and until the NIFTY trades below this
level, it is likely to remain under consolidation. For a fresh sustainable up
move to occur, NIFTY will have to move past these important pattern
resistances.
It is important to note that after the pullback of nearly
300-odd points, the NIFTY has not shown any retracement and is ending on a flat
note at Close levels. This is clear indication of inherently positive bias in
the Markets. However, until the Markets moves past the mentioned critical
levels, we might see it continue to consolidate in broad range. However, the
downsides will remain absolutely limited but some amount of volatility will
remain ingrained. All lead indicators, F&O data and the current structure
of the Charts point towards positive 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
+91-98250-16331
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