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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.