MARKET OUTLOOK FOR TUESDAY, JULY 18, 2017
Markets continued to inch upward on Monday as the NIFTY
ended yet another day with modest gains of 29.60 points or 0.30%. Markets
participants continued to chase momentum and the Markets maintained its specified
levels on the Charts. On Tuesday, we expect a modestly positive start and we
will see Market participants continuing to chase momentum. While this happens,
it is high time that such chase of momentum should be accompanied with great
amount of caution. The reason behind this is that the NIFTY stands overbought
on both Daily and Weekly Charts and this warrants our attention.
Tuesday will see the levels of 9930 and 9975 acting as
immediate resistance levels. Supports will come in lower at 9860 and 9820
zones.
The Relative Strength Index – RSI on the Daily Chart is
76.8977. This is bullish as RSI has market a fresh 14-period high but at the
same time, we cannot ignore the fact that it trades overbought. The Daily MACD
too stays bullish while trading above its signal line.
Pattern analysis shows the Markets continuing with its
uptrend after moving past the rising trend line drawn from 9200 zones. In event
of any consolidation, this trend line is expected to act as support.
All and all, frenzied chase of momentum is likely to
continue to keep Markets buoyant; we need to exercise extreme levels of caution
while approaching the Markets. Given the overbought nature of the Markets from
every angle, some sharp corrective move or a chance of the Markets getting into
consolidation mode cannot be ruled out. Every up move will make the Markets
vulnerable to sharp corrective bouts. A cautious approach with great caution 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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