MARKET TREND FOR THURSDAY, APRIL 06, 2017
The Indian Equities had a momentous session yesterday as it
went on to mark a fresh high and end with modest gains. The Closing remained at
its life time highs but we believe, in the process, the benchmark NIFTY50 has
made a temporary high for itself. Though a flat to modestly positive start to
the Markets cannot be ruled out but with each higher levels, NIFTY will now
remain susceptible to profit taking. Though for a very temporary term, we
expect some corrective activity to set in.
The levels of 9285 and 9310 will act as immediate resistance
levels, the supports will come in much lower at 9190 and 9130 levels.
The Relative Strength Index – RSI on the Daily Chart stands
at 71.8540 levels. It is not only overbought but continues to throw Bearish
Divergence against the price. RSI has not set a fresh high while NIFTY has done
so. The Daily MACD is bullish as it has reported a positive crossover. On the
Candles, a Doji and a Candle with long lower shadow has occurred.
This is very significant given their local on the Charts. Though a confirmation
will be required, they hold a potential to halt the up move temporarily.
The NIFTY April futures have shed yet another 3.26 lakh
shares or 1.46% in Open Interest.
The pattern analysis shows a similar and confirming picture.
The NIFTY has successfully marked and completed a breakout but it has now
become slightly overstretched. The fatigue and tiredness remain evident on the
lead indicators and has shown clear signs of formation of a immediate top for
the Markets.
Overall, we repeat that we see no signs of any reversal of
trend but some halt in the current up move surely seems imminent. We recommend
not creating any major exposures but remaining focused on very vigilant protection
of profits at higher levels. Policy of sticking to very selective stocks will
need to be adopted over coming days.
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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