MARKET TREND FOR WEDNESDAY, APRIL 26, 2017
Domestic Equity Markets had yet another buoyant session as
the benchmark NIFTY50 ended the day with decent gains of 88.65 points or 0.96%.
As evident from the Charts, NIFTY has broken out from the corrective channel
that it had formed while closing at its lifetime highs. At this juncture, we
wish to draw attention to few important factors. Though we may see a positive
start to the Markets on Wednesday, this is the time that we may obviously not
sell the Markets given the very strong primary uptrend but this is certainly
the time when we have to now focus and lay our utmost emphasis on protecting
profits. The developments in the US given the proposed tax breaks are likely to
instill volatility in the equity markets in general over coming days.
The 9315 and 9345 levels are likely to act as immediate
resistance while supports come in much lower at 9250 and 9175 levels.
The Relative Strength Index – RSI on the Daily Chart is
66.6009 and throws up Bearish Divergence against the price showing tiredness in
the Markets. The MACD is still bearish while trading below its signal line. On
Candles, a rising window (a gap) occurred. Though this is bullish, it may not
realize its full potential given the tiredness of the lead indicators.
The pattern analysis shows very clearly that the NIFTY has
broken out of a small corrective channel which was formed within a primary
uptrend. The breakout has expectedly occurred in the direction of the major
trend. There are chances that the Markets consolidate and fill up the gap it
has created before moving upwards.
All and all, with the primary trend remaining intact, we
very explicitly recommend not to throw caution into the air. The tax breaks
proposal in the US is likely to instill volatility in the global markets and
cause some likely spikes in the US Bond Yields. Also, the lead indicators on
the current charts show some tiredness and therefore there are chances we may
see some volatility ingrained in our markets as well. Being the penultimate day
of expiry, the session is also likely to remain dominated with rollover centric
activities. Cautious approach is advised for the day.
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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