MARKET OUTLOOK FOR TUESDAY, MAY 30, 2017
Despite pulling back nearly 200-odd points from the support
zone of 9380-9400 zones, the Markets on Monday showed no signs of letting up as
the benchmark NIFTY50 ended the day with nominal gains of 9.80 points or 0.10%.
Though bearish divergence has continued to persist on lead indicators, the
Index has continued to display good amount of strength. On Tuesday, we expect a
quiet start and expect such range bound oscillations to continue. The persistent
bearish divergences on the Daily Charts may cause the Markets to oscillate in a
range.
The levels of 9640 and 9675 will act as immediate resistance
levels. The supports come in at 9550 and 9510 zones.
The Relative Strength Index – RSI on the Daily Chart is
68.8661 and it continues to show Bearish Divergence. The RSI has not marked any
fresh highs while the NIFTY has gone on to mark fresh 14-period high. The Daily
MACD is bullish as it trades above its signal line.
The pattern analysis shows the Markets attempting to
breakout above the rising trend line drawn from 9200 levels. Currently though
the NIFTY stays above that trend line, the lead indicators that show tiredness
remain cause of concern. It remains over bought on Stochastic as well.
Overall, we reiterate that the undercurrent in the Markets
remain very much buoyant. Though the Markets are not overbought on Daily Chart,
the persistent emergence of Bearish Divergence may keep NIFTY away from a
runaway rise and force itself again in a brief period of consolidation.
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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