MARKET OUTLOOK FOR TUESDAY, JANUARY 17, 2017
The Indian Equities spent a range bound session and
continued to consolidate at Close levels as the benchmark NIFTY50 ended the
Monday’s session with minor gains of 12.45 points or 0.15%. A modestly positive
start is expected today and we will see the NIFTY inching once again towards
its 100-DMA levels. The 100-DMA level which stands at 8439 today will remain
important level to watch out for at
Close levels. The zones of 8440-8460 will continue to pose area resistance to
the Markets.
For today, the levels of 8460 and 8495 will act as immediate
resistance levels for the Markets. The supports will come in at 8360 and 8325
levels.
The Relative Strength Index – RSI on the Daily Chart is
66.7407 and it does not show any failure swing. However, the NIFTY50 has formed
a fresh 14-period high while RSI has not and this has resulted into Bearish
Divergence. The Daily MACD stays bullish and continues to trade above its
signal line. No significant formation is observed on Candles.
The NIFTY January futures have added over 2.22 lakh shares
or 1.12% in Open Interest. This indicates positive bias and shows that the
undercurrent remains buoyant.
The pattern analysis show very clear picture and shows the
zones of 7900-7920 being confirmed as the immediate bottom for the Markets.
Further it also makes evident that the NIFTY consolidated around 200-DMA and
then moved up again. So, this area – 200-DMA – which earlier acted as the
resistance will now act as support in event of any range bound consolidation.
On the upper side, the 100-DMA remains a critical resistance to watch out for
at Close. As projected on couple of occasions, the NIFTY will not show any
runaway rise until it moves past 100-DMA and closes well above it.
The overall structure of the Charts throws distinct
possibilities of consolidation happening for some more time. On one hand, the
NIFTY has added OI while coming off from its lows which is a sign of underlying
positive bias; and on the other hand, the lead indicators are showing mild
signs of fatigue. We reiterate that the stock specific approach will hold the
key in coming days and all the intermittent dips should be continued to be
utilized to make quality purchases.
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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