Saturday, March 4, 2017

MARKET TREND FOR THURSDAY,MARCH 02, 2017

MARKET TREND FOR THURSDAY,MARCH 02, 2017
Fuelled by stronger than expected GDP data which belied the expected adverse effects of demonetization, the Markets saw some upsurge as the NIFTY ended the day gaining 66.20 points or 0.75%. This was further aided by very buoyant global equity set up. Here, at this juncture, there are some important factors that one needs to take care of. There is no doubt that liquidity is severely chasing the Markets but with the end of the yesterday’s session, the NIFTY has halted precisely near the Double Top resistance of 8940-8950 zones. We had mentioned these levels in our yesterday’s note and the Markets have halted their up-move very near to these levels. However, today, we might see a positive opening and Markets may trade positive in the initial session and even test 8970-9000 mark but situation might warrant deep attention towards Close. Possibility of the Markets paring gains, if at all there are any, towards the end may not be ruled out. It would be wise not to give a frenzied chase to the Markets until it consolidates a bit given the slightly overbought nature of the Markets.


For today, the levels of 8990 and 9025 will act as immediate resistance levels for the Markets. The supports come in much lower at 8865 and 8810.

The Relative Strength Index – RSI on the Daily Chart is 70.6383 and it trades slightly overbought. The NIFTY has set a fresh 14-period high whereas the RSI has not yet and this has resulted into a Bearish Divergence on this oscillator. The Daily MACD still continues to remain bearish while trading below its signal line.

On the derivative front, the NIFTY March futures have massive 11.44 lakh shares or 5.37% in Open Interest. This indicates very strong undercurrent in the Markets.

The pattern analysis shows that the NIFTY has ended at its Double Top pattern resistance at Close levels. Though it still rules its immediate highs and upward moves cannot be ruled out, these levels at Close needs to be critically monitored. We will continue to see the up surge in the Markets given the frenzied chase by liquidity but that will make the Markets vulnerable to profit taking bouts from higher levels. Though we do not rule out continued surge in the Markets, every up move will make NIFTY vulnerable to profit taking bouts as the NIFTY seems overextended at present.

Overall, we reiterate that the undercurrent remains extremely buoyant and we expect the NIFTY to extend its gains, at least in the initial session. However, having said that, as the Markets once again approaches the 9000-mark, the protection of profits at those levels will remain immensely important. We recommend highly vigilant protection of profits at higher levels while dips may be continued to be used for making highly selective stocks specific purchases.

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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