MARKET OUTLOOK FOR TUESDAY, JUNE 20, 2017

MARKET OUTLOOK FOR TUESDAY, JUNE 20, 2017

In a much better than expected session on Monday, the benchmark NIFTY50 pullback after couple of days of consolidation. Though it came off a  bit from the high point of the day, it still managed to end the day with decent gains of 69.50 points or 0.72%. There is no doubt that the Markets have as of now averted any possibility of a further decline as it climbed above the 9600-9625 levels. On Tuesday, we expect a modestly positive start, and in all likelihood the Markets may extend their gains and attempt go near 9700-mark. However, we still do not expect any runaway rise beyond these levels immediately.

The levels of 9675 and 9710 will act as immediate resistance levels for the day. While supports will come in lower at 9610 and 9550 zones.

The Relative Strength Index – RSI on the Daily Chart is 62.6094 and it stays neutral showing no bullish or bearish divergence against the price. The MACD continue to trade below its signal line and is bearish. On Candle, a while body has occurred. This very much resembles to a not-so-classic rising star. This is bullish but it needs confirmation on the other day.

Overall, the F&O figures do not suggest any significant change in sentiment. However, Monday’s pullback is due to short covering and it would be important to see if this gets replaced with fresh buying.

All and all, it would be no surprise if we once again see the NIFTY inching upwards. However, it is very important to observe that we cannot ignore the overbought nature of the Markets on the Weekly Chart. So, it would be healthy for the Markets if it still spends some more time consolidating before it breaks its previous high and moves up. We do not expect any runaway rise in the Markets and if the Markets test the levels of 9700-9710 again, it would be important to guard once gain from the profit taking bouts.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA

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