MARKET OUTLOOK FOR THURSDAY, MAY 25, 2017
In our yesterday’s note, we had mentioned about the
importance of levels of 9380-9400 in the immediate short term. On Thursday, the
benchmark NIFTY50 managed to stay afloat above these zone for the major part of
the session but the last hour and half of trade saw the NIFTY slipping and
ending the day notch below this levels. The NIFTY lost 25.60 points or 0.27%.
We enter the expiry of the current derivative series. The zone of 9380-9400
still remains critical to watch out for. Though the session will remain
dominated with rollover centric activity, it would be critically important for
the Markets to crawl back above 9380-9400 in order to avoid further weakness
from creeping in.
The levels of 9400 and 9465 are immediate resistance levels
today. The supports come in lower at 9330 and 9280.
The Relative Strength Index – Relative Strength Index on the
Daily Chart is 53.4156. Bearish divergence has once again emerged as the RSI
has set a fresh 14-period low while NIFTY has not yet. The Daily MACD is
bearish as it continues to trade below its signal line.
The pattern analysis in the Close charts show the Markets
taking a downward breach from expected lines from the sharp wedge it had
created. NIFTY has retraced after it
tested the rising trend line drawn from 9200 levels. In the process, it has
marked 9532 as its immediate top for the immediate short term.
The expiry day is very much likely to instill volatility in
the session. The NIFTY remains oversold on the Stochastic and it has seen OI
increasing over previous two days of decline. This indicates creation of shorts
which may lend some stability in the close vicinity of these levels. We
reiterate to avoid shorts and preserve cash. Dips should be utilized to make
select purchases. Some stability, even if temporary, can be expected in close
vicinity of current 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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