MARKET OUTLOOK FOR THURSDAY, JULY 20, 2017
The Markets had a decent pullback on Wednesday as the benchmark
NIFTY defended the 9790 level and ended the day with a decent uptick of 72.45
points or 0.74%. Given the overall
technical structure, we feel that there is high time that Markets be in some consolidation
and form an area pattern before any serious up move. The very fact that the up
move that we saw on Wednesday has come with decline in Open Interest and therefore
it indicates that heavy short covering led to this pull back. This has kept Markets not fully insulated from
profit taking bouts in future.
Thursday will see the levels of 9910 and 9945 acting as
immediate resistance levels for the Market. Supports come in at 9850 and 9790.
The Relative Strength Index – RSI on the Daily Chart is 68.6617
it stays neutral showing no bullish divergence or any failure swings. The Daily
MACD is bullish and it still trades above its signal line. A big white candle occurring
on the Candles have established the potency of the support area from where the
NIFTY pulled back.
The pattern analysis shows NIFTY trading comfortable above
the rising trend line drawn from 9200 levels. This trend line, will play out as
support whenever Markets faces a corrective profit taking bout in future.
All and all, though the pullback that has occurred is has
been strong, but it has occurred more because of short covering. It would be
extremely essential if this gets replaced by fresh buying. Until this happens,
it would be difficult for the Markets to post any significant gains going
ahead. Until a comprehensive breakout is achieved, vulnerability to profit
taking bouts will persist despite strong primary uptrend remaining intact.
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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.