MARKET OUTLOOK FOR MONDAY, MAY 29, 2017
After remaining under minor correction, the benchmark
NIFTY50 not only successfully defended the important pattern support zone of
9380-9400 levels but also saw a sharp pullback. It went on to scale fresh highs
while it ended the day on Friday with a decent gain of 85.35 points or 0.90%.
Markets are now in uncharted territory once again and in a firm uptrend.
However, on Monday, we may see Markets taking some breather after over 200-odd
points of a technical pullback. Perhaps it is time again for the Markets to be
in a ranged consolidation, move sideways and return to stock specific activity.
The levels of 9625 and 9655 might act as resistance levels
for the day. The supports come in at 9570 an 9540 zones.
The Relative Strength Index – RSI on the Daily Chart is 68.3740
and it shows no failure swing. However, a Bearish Divergence has emerged as the
NIFTY marked a fresh 14-period high while the RSI did not. The Daily MACD is
bullish after reporting a positive crossover.
The pattern analysis shows that the Markets are attempting
to achieve a clear breakout from the rising trend line drawn from 9200 levels.
The rising nature of the trend line has so far prevented the Markets from a
clear breakout.
All and all, it is beyond doubt that the Markets are buoyant
and the undercurrent that is exhibited is extremely bullish. While the Markets
attempt to scale fresh high, it is very likely that it takes some breather and consolidates
once again within a defined range. While there will be no major downsides, some
sideways movement within a range with some volatility cannot be ruled out.
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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