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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.