Friday, January 20, 2017

MARKET TREND FOR FRIDAY, JANUARY 20, 2017

MARKET TREND FOR FRIDAY, JANUARY 20, 2017
The Equity Markets on Thursday continued to remain range bound as expected on the projected lines. The benchmark NIFTY50 ended the day with minor gains of 18.10 points or 0.22%. We expect the Markets on Friday to once again open on a quiet note and once again continue to see range bound consolidation. It is extremely important to note that though the domestic markets are exhibiting positive bias, the spiking bond yields in the US is likely to put a check on the NIFTY’s up move. Moreover, it is yet to move past the 100-DMA and 8440-8460 zones and this is likely to put the Markets some more time into consolidation.

For today, 8460 and 8495 will continue to act as immediate resistance levels for the Markets.  The supports will come in at 8390 and 8335 levels.

The Relative Strength Index on the Daily Chart is 67.3950 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD stays bullish while trading above its signal line. On the Candles, no significant formation has been observed.

On the derivatives front, the NIFTY January series have shed over 3.62 lakh shares or 1.76% in Open Interest. This signifies some minor profit booking at higher levels. However, the figures do not reflect or point towards any major sentiment change in the Markets.

While having a look at pattern analysis, it remains evident that the Markets have been consolidating after moving past its 200-DMA levels. This further establishes 200-DMA as the interim immediate support for the Markets in event of any ranged consolidation. On the other hand, the NIFTY has been resisting to its 8435-8460 zones which also includes the 100-DMA level as well. On the Weekly note, the set up remain buoyant but the Daily Charts exhibit some possibilities of the NIFTY oscillating in a defined range. The Bollinger Bands on the Daily Charts are 45.16% wider than normal. This suggests higher-than-normal volatility in NIFTY. Therefore, the probability of the volatility decreasing and the NIFTY remaining in a trading range has increased.

Overall, the Charts present a mixed picture. Though the current set-up certainly looks buoyant, external technical factors like the spiking bond yields in the US and other technical indicators may put the Markets into some more time into range bound movement. Fresh up move shall only occur with Close above 8460 levels. Shorts should be avoided given that fact that the NIFTY continues to trade above its critical supp ort levels and the undercurrent remains intact. Major directional bias may be taken after Close above 8460 levels and until then stock specific strategy should be adopted in the Markets.

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.