MARKET OUTLOOK FOR TUESDAY, MAY 16, 2017
In a better-than-expected session on Monday, the Indian
Equities spent the entire session moving sideward in a narrow 20-odd points
range and ended the day with modest gains of 44.50 points or 0.47%. The benchmark
NIFTY50 closed at yet another high today. On Tuesday, we do expect a modestly
positive to flat start to the Markets. At this juncture, we need to take note
of two important points. First, the Markets are yet to clear the 9450-9470
zones which are critical pattern resistance; and second, a sharp rising Wedge
is created as evident from the Close Charts and this keeps Markets vulnerable
to profit taking bouts at higher levels.
The levels of 9350 and 9375 will act as major pattern
resistance levels for the markets. Supports come in at 9410 and 9365 zones.
The Relative Strength Index – RSI on the Daily Chart is
68.0285. A Bearish Divergence has emerged as the NIFTY has marked a fresh
14-period high while RSI has not. MACD
is bullish while trading above its signal line. A small while body has occurred
on Candles but in the present structure and pattern, it holds no significance.
The Pattern Analysis shows the Markets tracking the upper
trend line drawn as likely resistance. As mentioned in our yesterday’s note,
given the rising nature of the trend line, the potential resistance levels
shifts higher every day preventing a clear breakout in the Markets.
All and all, a sharp rising wedge is formed on the Closing
Charts. We reiterate high caution at current levels and though the primary
trend remains intact, Markets continue to remain vulnerable to profit taking
bouts at higher levels. While keeping exposures at modest levels, cautious
outlook 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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