MARKET TREND FOR THURSDAY, JANUARY 12, 2017
Perfectly on the analyzed lines, the Indian Equities staged
a decent upsurge moving past it’s all important 200-DMA and ended the session
yesterday with a decent gain of 92.05 points or 1.11%. Yesterday’s up move is
significant in more than one ways. It has not only confirmed the bottoms at
7900-7920 zones by forming higher tops, but it have also further broken out
from a broad trading range. Speaking purely on a technical note, we expect a
positive opening and the NIFTY is likely to continue with its up move at least
in the initial trade. The gain has thrown up couple of other positive technical
indications as well which is all likely to aid the further up move is likely to
head towards its next logical target of 8450.
For today, the levels of 8140 and 8450 will act as immediate
resistance levels for the Markets. The supports come at 8355 and 8310 levels.
The RSI—Relative Strength Index on the Daily Chart is
65.3531 and it has made its fresh 14-period high which is distinctly Bullish.
It does not show any bullish or bearish divergence vis-à-vis the price
movement. The Daily MACD is firmly bullish while it continues to trade above
its signal line. On the Candles, a rising window has occurred. This
usually implies continuation of the uptrend. More so when there have been 4 rising
windows in the past 50 days which makes this even more bullish.
The NIFTY January futures have added over 6.45 lakh shares
or 3.45% in Open Interest. This clearly indicates that the up move that we saw
in the previous sessions is supported by fresh longs.
Pattern analysis suggests couple of important things. First,
it clearly confirms the current lows of the 7900-7920 zones as its immediate
supports. Secondly, the NIFTY has achieved a further break out on the upside
from its broad trading range that it had formed over last more than two months.
Further, it has also successfully moved past the 200-DMA and closed well above
it. Also, it has closed 2.7% above the upper Bollinger Band. This formation
when read along with other lead indicators the upward trend has good chances to
continue barring few intermittent consolidations.
Overall, from look at all of the above indicators, the
patterns and the F&O data, it is very much likely that the NIFTY move
upwards with its next logical targets of 8450. It would be around these levels
that we might see some pause. Until this happens, we will continue to see the
undercurrent remaining buoyant and corrections remaining limited to
intermittent profit taking bouts. Sectors like PSUBANKS, ENERGY, FMCG, etc will
see distinct outperformance over others.
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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