MARKET OUTLOOK FOR MONDAY, JUNE 05, 2017
While we had referred the levels of 9650 as an immediate
resistance level and a temporary top for the Markets, the benchmark NIFTY50
attempted to move past that level on Friday. While the session remained range
bound, the Markets ended the day with modest gain of 37.40 points or 0.39%. On
Monday we expect a quiet to modestly positive start. We see that the Markets
may attempt to mark fresh highs but this is the time we approach the Markets
with extreme sense of caution and exploit all up moves to protect profits at
higher levels.
With the levels of 9660 and 9710 acting as likely resistance
levels for Monday, the supports come in at 9610 and 9730 zones.
The Relative Strength Index – RSI on the Daily Chart is
71.0002. It is not only overbought once again but it also shows a Bearish
Divergence as the NIFTY again marked a fresh 14-period high while RSI did not.
The Daily MACD remains bullish while trading above its signal line. On the
Candles, a rising window occurred. This is a gap, and this usually has bullish
implications on the following day. But still, higher levels need to be
vigilantly guarded.
The pattern analysis shows the Markets breaking out of the
rising trend line resistance that it was facing since couple of days. This
rising trend line was drawn from 9200 levels and the rising nature of this
trend line was preventing the Markets from a clear breakout.
Overall, there are all chances that we see some initial
buoyancy. However, we reiterate that we need to approach the Market with great
caution. We do not say that we will have significant downside correction but
the currently structure of the Markets and the lead indicators certainly point
towards some minor but overdue corrective action. All up moves should be
utilized to protect profits at higher levels while keeping fresh purchases
highly selective and limited.
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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