Saturday, March 4, 2017

MARKET TREND FOR MONDAY, FEBRUARY 27, 2017

MARKET TREND FOR MONDAY, FEBRUARY 27, 2017
The Indian Equities had a volatile session on Thursday as the benchmark NIFTY50 ended with minor gains of 12.60 points or 0.14%  after witnessing a typically rollover dominated and induced volatility in the session. Today, the Markets are likely to see a tepid and modestly negative start as it would begin the week while being in overbought territory and also being very near to a major pattern area resistance in form of a Double Top on the Close Charts. Without disputing the fact that the undercurrent still predominantly continues to remain buoyant, we see all the possibilities of some sharp and volatile corrective activities taking place and the behavior of the Markets vis-à-vis the 8960-9000 zones will remain immensely important.

For today, 8975 and 9005 will act as immediate resistance levels for the Markets. The supports come in lower at 8865 and 8810 levels.

The Relative Strength Index – RSI on the Weekly Chart is 74.9121 and it do not show any failure swings. However, the NIFTY has continued to set a fresh 14-period high while the RSI has not and this has resulted into Bearish Divergence. Further, this trades in overbought territory as well. The Daily MACD is bullish post reporting a positive crossover and it trades above its signal line. No significant formation on Candles is observed.

The pattern analysis clearly shows the NIFTY approaching one of its major pattern resistances. The level of 8948-8950 zones is a major pattern area resistance for the NIFTY in form of a Double Top. Even with the bullish underlying intentions, there are all the chances that the Markets see some temporarily halt to the up move and see itself once again into some consolidation. Some profit taking bouts from higher levels and some range bound consolidation cannot be ruled out.  

Overall, we expect the NIFTY to once again face some broad ranged consolidation. This will keep the sessions in coming days relatively more volatile. At the same time, we also see such expected consolidations and corrective activities help the Markets gather further impetus for possible up move again. Given the underlying buoyant structure on the Charts, we very strongly recommend to refrain from creating major short positions. Every corrective dip is likely to offer opportunities for select stock picking. With volatility expected to rule the roost, positive caution 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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