MARKET TREND FOR TUESDAY, JANUARY 24, 2017
The Markets showed inherent buoyancy as it witnessed a
classical intraday correction while it ended the day with modest gain of 42.15
points or 0.50%. Very much on projected lines, the zone at the 200-DMA which
also converges with a major pattern support saw the benchmark NIFTY50 rebounding
from there. Today, we expect a flat to modestly positive start to the Markets.
Though positive trade is expected in the morning, the NIFTY is still likely to
remain in a defined broad trading range with the zones of 100-DMA acting as
immediate resistance.
For today, the levels of 8430 and 8465 will act as
resistance while supports are expected to come in at 8345 and 8310.
The Relative Strength Index – RSI on the Daily Chart is
60.3418 and it remains neutral. It does not show any failure swing or any kind
of bullish or bearish divergence. The Daily MACD is bullish while it trades
above the signal line. On Candles, a piercing line has occurred. This
implies evident show of strength and usually implies shifting of momentum in
the bullish hands.
The NIFTY January series saw shedding of over 25.07 lakh
shares or 13.94% while February series saw addition of 28.33 lakh shares or
73.35% in Open Interest. The rollovers were seen with addition of net open
interest which implies underlying buoyancy.
Coming to pattern analysis, the NIFTY has kept itself in a
broad trading range which exists between the area support and the 200-DMA
levels on the lower side and the 100-DMA levels on the upper side. This has
seen the formation of broad 150-odd points trading range and the NIFTY is
expected to continue to oscillate between these two levels with a positive
bias. As mentioned often, no runaway rise would occur unless the NIFTY moves
past 8460 level and closes above it.
Overall, we enter the penultimate day of expiry of the
current derivative series. The expiry being one day earlier and this being a
truncated week, we may see some caution weighing in at higher levels. Also, the
wider than normal Bollinger Bands on the
Daily Charts may keep the NIFTY in a broad trading range for some more
time but the undercurrent continues to remain intact. We expect the volatility
to remain and even increase as we approach the expiry. The softened US Bond
Yields and the US Dollar Index may aid the Markets to remain stable with upward
bias in the immediate short term. Overall, positive outlook for the Markets is
advised for 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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