MARKET OUTLOOK FOR WEDNESDAY, MAY 24, 2017
Corrective actions continued to dominate the trade on
Tuesday as the NIFTY50 ended the day with net loss of 52.10 points or 0.55%.
While going into Wednesday, we expect such corrective activity to continue. The
zones of 9380-9400 are important pattern support and the behavior of the
Markets vis-à-vis these levels will be
important to watch for. The Markets may see a modestly positive start but the
maintenance of the levels of 9380-9400 will be important and any breach below
these levels is likely to keep NIFTY under corrective mode for some more time.
The levels of 9425 and 9450 will continue to pose resistance
going ahead. Supports come in at 9375 and 9310 zones.
The RSI—Relative Strength Index on the Daily Chart is
55.1630 and it has reached its lowest value in last 14-periods which is
bearish. Also, the RSI has set a fresh 14-period low while NIFTY has not. This
has resulted into Bearish Divergence. The Daily MACD is bearish trading below
its signal line. No significant
formations were observed on Candles.
The pattern analysis suggests that the Markets have broken
on the downside from a sharp wedge that it has created. On the Charts, it has
continued to resist to the rising trend line and retracing from there once
those levels were tested.
Overall, the corrective mood is likely to persist for some
more time. To add to that, we enter the penultimate day of expiry of the
current derivative series and this is all likely to induce volatility into the
session. We reiterate our view to adopt stock specific approach and continue to
keep overall exposures limited. Cash should be preserved while avoiding shorts
in the Market.
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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