Tuesday, January 10, 2017

Daily Market Trend Guide -- Tuesday, January 10, 2017

MARKET TREND FOR TUESDAY, JANUARY 10, 2017
Indian Equities headed nowhere today and traded in a very narrow 25-odd point intraday range while ending the day with marginal loss of 7.75 points or 0.09%. We had mentioned in our yesterday’s edition that NIFTY is expected to consolidate and it traded very much on expected lines. Today is likely to be no different. Though we once again expect a quiet start to the Markets, we expect the Markets to consolidate and expect NIFTY to remain in a narrow  trading range with the levels of 200-DMA which stand at 8282 today continuing to act as important resistance at Close levels. Just like in the previous sessions, the NIFTY consolidating near the resistance area is a sign of positive consolidation and it makes very much evident the fact that the underlying buoyancy in expected to remain intact in the immediate short term. As expected, CNXIT consolidated its performance and out-performed in the yesterday’s session.

For today, the levels of 8280 and 8335 will act as immediate resistance levels for the Markets. The supports will come in at 8195 and 8150 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.2326 and it continues to remain neutral. It does not show any bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line. On the Candles, no significant formations are observed.

On the derivative front, the NIFTY January futures have shed 19,500 shares or just 0.10% in Open Interest. This figure does not signify and major change in underlying sentiment.

While having a look at pattern analysis, it becomes evident that the NIFTY is resisting at the upper end of the broad trading range that it has formed. This range is in form of a rectangle formed after the NIFTY took support in the 7900-7920 zones and subsequently forming a Double Bottom support. Another key area of resistance just near this upper end of the range is the convergence of the 200-DMA which stands at 8282 today. This level will continue to act as area resistance to the NIFTY at Close levels. The current Bollinger Bands are 11.99 % narrower than normal and they individually do not suggest anything conclusive about the future volatility.

All of the above suggest that we might see some more consolidation in the given range today. We might see the levels of 50-DMA which is 8194 acting as support to the NIFTY at Close levels. Runaway rally, as also mentioned in our yesterday’s edition, is not expected until the NIFTY moves past and closes above 200-DMA. Consolidation is expected, which is likely to be in form of range bound movement coupled with some amount of volatility and intermittent bouts. Sector churning will be evident and some select stocks will out-perform. We advise highly stock specific and selective approach to the Markets today.

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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