MARKET TREND FOR MONDAY, FEBRUARY 13, 2017
The NIFTY on Friday headed nowhere as it traded 20-odd
points range, oscillated on either side and finally ended the day with nominal
gains of 15.15 points or 0.17%. Today, we expect the Markets to open on a positive
note and look for directions. However, just like entire previous week, the
NIFTY50 continues to remain overbought and therefore any runaway sustainable
rise may not be expected. Any up move or upward spike will, therefore, continue
to remain vulnerable to profit taking pressures from higher levels.
For today, the levels of 8825 and 8900 will act as immediate
resistance levels while supports will come in at 8710 and 8650 levels.
The RSI—Relative Strength Index on the Daily Charts is
72.8117 and it remains neutral showing no divergences against the price.
However, it trades in overbought territory. The Daily MACD has flattened is
trajectory but it is bullish as it trades above its signal line.
However, it is
moving towards reporting negative crossover. No significant fresh formation on
Candles is observed. However, in previous sessions, an engulfing bearish line
followed by a long lower shadow has effectively halted the advance.
The NIFTY February futures have shed just over 75, 525
shares or nominal 0.35% in Open Interest. This figure is too small and
insignificant to individually points towards change in any underlying
sentiment.
The pattern analysis presents a cautious picture as the
NIFTY had been tracking the upper Bollinger band while remaining in overbought
territory. Such structure usually results in some short term consolidation or
minor correction. Furthermore, even if we see some upward move in NIFTY, it
will then lead the Markets towards important pattern resistance levels on the
Weekly Charts. This movement along with the overbought nature of the Markets
will prevent any runaway rise from occurring.
Overall, we advise to continue to approach the Markets will
great caution. Up-moves may be there but they will not be without the
vulnerability of profit taking bouts. The Overbought nature of the Markets are
primarily likely to prevent any runaway up moves but if such up moves occur,
then the sustainability of the higher levels will be in question. Therefore,
continuance of approaching the Markets with great caution along with adopting
stock specific approach is advised for the day.
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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