MARKET TREND FOR THURSDAY, MAY 11, 2017
The Markets had a buoyant-than-expected session on Wednesday
as it ended the day with decent gain of 90.45 points or 0.97%. In this process,
the benchmark NIFTY50 not only marked its fresh lifetime highs at Close levels
but also attempted to breakout from the sideways consolidation zone that it had
created over past couple of days. The breakout is attempted and not yet
confirmed. However, we expect confirmation coming on Thursday. A modestly
positive opening is expected but the behavior of the NIFTY in the zones of
9425-9440 will be important as it will track the upper Bollinger band. But
overall, momentum is very much expected to continue.
The levels of 9425 and 9450 will be immediate resistance
levels that we should watch for. The supports come in at 965 and 9320 zones.
The Relative Strength Index – RSI on the Daily Chart is
66.9304. A Bearish Divergence is observed as NIFTY has marked a fresh 14-period
high but RSI has not yet. The Daily MACD has turned bullish once again and it
now trades above its signal line.
The pattern analysis clearly shows that after marking the
previous highs of 9367, the NIFTY had formed a sideways trajectory and had been
consolidating by oscillating in a capped range. In Wednesday’s session, the
NIFTY has attempted to mark a fresh breakout.
However, this breakout remains
unconfirmed. A confirmation would be required and the behavior of the Markets
vis-à-vis the levels of 9425-9440 will be critical to watch out for.
All and all, on Charts, it is clearly visible that though a
strong breakout is attempted, it still remains an unconfirmed breakout and we
will need to significantly move past the 9450-9475 mark until a clear breakout
is achieved and the NIFTY moves past the rising trend line that it is currently
resisting. However, odds remain much in
favor of the up move continuing. Cautious optimism 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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