MARKET OUTLOOK FOR WEDNESDAY, JUNE 07, 2017
In our Tuesday’s note, we had categorically cautioned
investors that the overstretched Markets may face some minor but imminent
corrective action. Though markets did not see a deep cut but it did come off nearly
80-odd points from the opening highs while ending the day with net loss of
37.95 points or 0.39%. On Wednesday as well, we expect such corrective behavior
of the Markets to continue. Though the downsides may not be brutal, but the
kind of corrective activity that we saw on Tuesday is likely to repeat itself.
Barring some stock specific action, we expect the Markets to continue to show
minor correction on Wednesday as well. The levels of 9709 has now become an
immediate top for the Markets.
While the levels of 9650 and 9710 will act as potential
resistance zone for the Markets, the supports will come in at 9605 and 9560
zones.
The Relative Strength Index—RSI on the Daily Chart is
66.8909 and it has just crossed below from a topping formation which is bearish.
The Daily MACD still remains bearish while it trades below its signal line. On
the Candles, an Engulfing Bearish Line has occurred. Since it has occurred
after a uptrend, it potentially marks a short term top for the Markets.
The pattern analysis show Markets still ruling above the
upper trend line that it breached on the upside. This trend line is rising and
is drawn from 9200 levels is likely to lend support to the Markets in immediate
short term.
Overall, some pockets will continue to show out-performance
and stock specific action is likely to dominate the session. In the same
breadth, we see broader Markets continue to consolidate and show minor
corrective activities. Cautious outlook 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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