MARKET OUTLOOK FOR THURSDAY, MAY 18, 2017
The Indian Equity Markets continued to end yet another day
with gains but the gains remained very modest to the extent of 13.50 points or
0.14%. The benchmark has continued to trade the upper Bollinger Band and has
once again shown enough signs that some amount of minor corrective action
remains inevitable even if it remains in extremely limited proportion. On
Thursday, we expect a flat to modestly negative opening and the Markets may see
some minor corrective action along with some sector-specific outperformance.
The levels of 9530 and 9565 will remain likely resistance
levels. Supports appear much lower at 9460 and 9410 zones.
The Relative Strength Index on the Daily Chart is 72.6752
and it remains clearly in overbought territory. The Daily MACD remains bullish
while trading above its signal line.
On the Candles, a Long Lower Shadow
occurred. Tough this is not a classical hammer as it contains a small upper
body, it has potential to temporarily halt the up move. Also, a spinning top
formation on the Candle along with this may cause further temporary halt in the
up move.
The pattern analysis very clearly suggests the Markets
trading the upper trend line drawn from 9180-9220 zones. As we had mentioned in
one of our previous notes, the rising nature of the trend line raises the daily
resistance levels for the Markets every day and prohibits the
Markets from
giving a clear breakout.
All and all, there are signs enough that Markets are overdue
to take a breather. Again, the downsides may remain limited but some minor
corrective activity in overdue and imminent. We recommend keeping exposure to
very moderate levels and lay emphasis on vigilant protection of profits at
higher levels.
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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