MARKET TREND FOR THURSDAY, MARCH 16, 2017
Indian equities remain thoroughly range bound ahead of Fed
outcome as it oscillated in a very narrow range ended up closing flat with
minor loss of 2.20 points or 0.02%. In a way, this exhibited strength once again
as after a robust up move on the previous day, the benchmark NIFTY50 did not
give any corrective move and instead consolidated in a flat range. Today,
despite the outcome of the Fed, we are likely to see a modestly positive
opening and with very limited downsides, NIFTY is likely to continue to
consolidate. The FII inflows have been heavily chasing the Indian Equities and
given some chances of modest corrective activities, it is likely to continue to
do so. Presently, the NIFTY had nearly discounted the imminent interest rate
hike and baring some range bound oscillations and some throw back after a
breakaway gap, NIFTY will continue to gather strength to move higher.
For today, the levels of 9125 and 9170 will act as immediate
resistance levels while supports come in at 9035 and 8975.
The Relative Strength Index on the Daily Chart is 73.7075
and it remains neutral showing no bullish or bearish divergence or any failure
swing. However, it continues to trade in overbought territory. The Daily MACD
is bearish as it continues to trade below its signal line. A Spinning Top
on the Candle portrays caution on indecisiveness in the Markets.
The NIFTY March futures have shed over added 90,375 shares
or 0.36% in Open Interest. This OI figure has remained unchanged and hence
maintains the bullish undertone build over the previous sessions and shows no
change in underlying sentiment.
While having a look at pattern analysis, after achieving a
breakaway gap from the Double Top resistance area on the Daily Charts, the NIFTY
has maintained those levels and this certainly displays strength in the
underlying sentiments. The NIFTY has chose to consolidate in a capped range and
it did not correct even after the previous day’s robust gains. Though this
displays strength, we cannot discount the fact that it trades in overbought
territory.
The F&O data show NIFTY is all likely to continue with
its uptrend. This reading is also supported by overall pattern analysis and the
volumes with which the breakout has occurred. However, we cannot discount the
fact that the NIFTY currently trades overbought. Given the present
circumstance, even with the strong undercurrent some range bound consolidation
is expected to continue and minor throwbacks cannot be ruled out. Overall,
while avoiding shorts at higher levels cash preservation and protection of
profits at higher levels is advised.
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.