Saturday, March 4, 2017

MARKET TREND FOR TUESDAY, FEBRUARY 28, 2017

MARKET TREND FOR TUESDAY, FEBRUARY 28, 2017
While ending the day with a modest loss the benchmark NIFTY50 not only ended its winning streak but also entered into consolidation while confirming the zones of 8920-8950 as a major area resistance in form of a Double Top. We expect the consolidation to continue and also see the 8920-8950 zones as an immediate resistance to the NIFTY at Close levels in the immediate short term. We expect a flat start to the Markets today. The trade is likely to lack any directional bias in the early part of the session and therefore the trajectory that the Markets form post opening will remain crucial to watch for. The downsides to the Markets will remain limited but the consolidation is likely to continue to infuse some volatility and broad range bound oscillations in the Markets.

For today, the levels of 8940 and 8995 will act as immediate resistance levels while the supports come in at 8825 and 8775 levels.

The Relative Strength Index – RSI on the Daily Chart stands at 68.8297 and it has just move below a topping formation. It remains neutral showing no failure swings or any divergence against the price. The Daily MACD has reported a negative crossover and it is now bearish while trading below its signal line. On Candles, no major formations are observed.

On the derivative front, the NIFTY March Futures have shed over 4.65 lakh shares or 2.13% in Open Interest. This shows some amount of unwinding of long positions and some profit taking from higher levels.

While having a look at pattern analysis, it is clear that the NIFTY has confirmed and marked the zones of 8920-8950 at a major pattern resistance in form of a Double Top at Close levels. With this, these levels have become an immediate resistance and minor top for the Markets for the immediate short term. Unless these levels are surpassed at Close, we will continue to see the NIFTY under range bound consolidation and is likely to remain volatile as well.

All and all, given the confirmation of a resistance zone, we advice to refrain from creating any major exposures in the Markets. The NIFTY is likely to lack directional bias for some sessions and is likely to remain in consolidation. Such consolidation is likely to be in the form of a range bound oscillations and this will induce some volatility in the Markets as well. Overall, in all likelihood, the Markets will continue to remain vulnerable to profit taking bouts from higher levels and negativity is likely to persist. Though it is likely to remain temporary in nature, cautious outlook along with preservation of cash is advised for today.

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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