MARKET OUTLOOK FOR THURSDAY, AUG 10, 2017
The recovery from the low point of the day on Wednesday in
the second half of the session remained short lived as the benchmark NIFTY50 slipped
further end the third day in the red losing 70.50 points or 0.71%. In the
process, it has added some more shorts into the system. Much on the expected
lines, the Markets breached its short term 20-DMA level and have gone on to
test the important pattern support of the rising trend line drawn from 9200
levels. Thursday’s opening would be crucial and it would important to see if
the Markets attempts to find support around current levels and if shorts come
to the rescue for a technical pullback.
The levels of 9950 and 10065 will act as important
resistance levels for the Markets. Supports come in at 9880 and 9820 zones.
The Relative Strength Index – RSI on the Daily Chart is 49.8802
and it has marked a fresh 14-period low which is bearish. It does not show any
divergence against the price. The daily MACD stays bearish while trading below
its signal line.
While having a look at pattern analysis, NIFTY has breached
its short term support of 50-DMA but has rested itself on a pattern support of
a rising trend line drawn from 9200 levels.
All and all, we need to see the Markets trading above 9900 zones
to avoid any further weakness from creeping in. Also, in any case, we strongly recommend
staying away from creating short positions as the Markets has seen sharp
buildup of short positions in the previous three sessions. At any point of
time, we may see Markets showing a equally sharp pullback owing to short
covering. With the chances of shorts getting trapped at lower levels, avoiding
short positions and picking up quality stocks with every decline is advised for
the day.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
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