MARKET OUTLOOK FOR WEDNESDAY, JULY 26, 2017
We had categorically mentioned that testing the
psychological mark of 10,000 can induce correction in the Markets. Keeping in
line with this analysis, the Markets did touch this mark but soon pared nearly 60-odd
points from the high levels of the day and ended the day flat with negligible
loss of 1.85 points or 0.02%. As mentioned in our yesterday’s note, we do not
expect a significant move beyond 10,000 mark too soon. We expect a quiet start
tomorrow and also expect a ranged consolidation to continue. Being the
penultimate day of the expiry, we also
expect rollovers induced volatility to persist.
The levels of 10010 and 10045 may act as immediate likely
resistance levels. The supports come in at 9910 and 9840 levels.
The Relative Strength Index – RSI on the Daily Chart is
70.6492. Though it remains neutral showing no divergences, RSI remains modestly
overbought. The Daily MACD stays bullish while trading above its signal line.
Pattern analysis show that though the Markets continue to
trade comfortably above the rising trend line, some amount of consolidation or
range bound correction cannot be ruled out with this trend line acting as
strong short term support.
Overall, the Bollinger bands remain nearly 49% wider-than-normal.
This is most likely to prevent any significant upside and may force the NIFTY
to remain in a range. Further rollovers too are likely to induce some
volatility in the trade. With the lead indicators modestly overbought, we
continue to reiterate a cautious view on the Markets 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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