MARKET OUTLOOK FOR WEDNESDAY, JULY 19, 2017
We had categorically mentioned in our yesterday’s note that
given the overbought nature of the Markets, they remain prone to sharp
corrective bout. Exactly on these lines, the benchmark NIFTY50 saw a sharp corrective
bout that started with a gap down opening. It finally ended the day with net
loss of 88.80 points or 0.90%. On Wednesday, we expect a tepid start and the
Tuesday’s low of 9790 will be critical levels to watch out for as they happen
to be a pattern support for the Markets.
Wednesday will see the levels of 9650 and 9685 as important
resistance levels. Supports will come in at 9790 and 9730 zones.
The Relative Strength Index – RSI on the Daily Chart is
64.0676. It has just crossed below from a topping formation. Daily MACD still
remains bearish while trading below its signal line. A falling window occurred.
This is essentially like a gap formation and this usually results into
continuation of the downward trend.
The pattern analysis show that after NIFTY successfully moved
past the rising trend line once again, on the downside, it has taken support on
this trend line. The level of 9790 happens to be this pattern support and this
level needs to be critically watched for.
All and all, despite some tepid start that is expected,
Markets will be in for a longer corrective pressure if the levels of 9790-9770
are breached. We also expect some volatility to persist as well in the Markets.
We recommend remaining very light on the overall exposures and refrain from
taking over leveraged positions in the Markets.
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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