MARKET OUTLOOK FOR MONDAY, AUG 14, 2017
The Friday’s session saw the benchmark declining for the
fifth day in a row while it ended the day losing 109.45 points or 1.11%. NIFTY
has ended the day below its 50-DMA but stays within its filter as of today. We
expect a quiet opening on Monday and there are chances that the Markets may
find some stability and attempt a respite from the current downtrend. As the
Markets have stayed within the filter of 50-DMA, a technical bounce back can be
expected. But in any case, the levels of 9700-9770 will continue to remain
extremely critical zones to watch out for. The behavior of the Markets
vis-à-vis these level will decide the depth of the correction over coming days.
The zones of 9770 and 9825 will act as important support
levels for the Markets. The supports come in at 9685 and 9610 zones.
The Relative Strength Index – RSI on the Daily Chart is
36.3013 and it has reached its lowest value in last 14-adys which is bearish.
It does not show any divergence against the price. The Daily MACD stays bearish
while trading below its signal line. Conflicting signals have occurred on
Candles. A falling window has occurred which usually results into continuation
of weak trend. On the other hand, a Doji too has emerged. This often signals
reversal from the current downtrend but this requires confirmation on the next
trading day.
The pattern analysis show that the NIFTY has ended below its
pattern support at 50-DMA but stays within its filter. Also, it rests on the
lower support line of the Channel that the Markets are currently trading in.
All and all, the Markets currently rest at pattern support and therefore the
zones of 9700-9770 remains extremely critical levels to watch out for. If the
Markets breach these levels, it may test 100-DMA which rests at 9538 levels.
However, evident creation of short positions and the current pattern support
increase the chance that we might see some respite from the corrective move and
we see some technical pullback.
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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