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