MARKET OUTLOOK FOR TUESDAY, AUG 01, 2017
As mentioned in our previous note, the NIFTY continued it’s
up move and closed at a fresh lifetime highs while it piled up gains of 62.60
points or 0.63%. We once again expect a modestly positive start on Tuesday and
we will see momentum sustaining at least in the initial trade. We cannot rule
out the possibility of the Markets continuing to attempt to scale fresh highs
but still the levels of previous high of 10114 continue to remain intact as an
immediate top for the Markets. More the Market approaches these levels, more
volatile it is likely to get.
Tuesday will see the levels of 10114 and 10150 playing out
as resistance levels for the day. Supports will come in at 10000 and 9965
levels.
The Relative Strength Index – RSI on the Daily Chart is
76.0928. A clear Bearish Divergence against the price appears as the RSI has
not marked a fresh 14-period high like NIFTY. The Daily MACD remains bullish
while trading above its signal line. No
significant formations were observed on Candles.
The pattern analysis show a sharp rising wedge formed on the
Daily Line Charts. This implies that there can always be a corrective action
and the Markets will have support of the rising trend line drawn from 9200
levels if it all if it sees any such corrective moves.
Overall, there is no option for the Market participants to
continue to chase the momentum. However, doing so without any precautions might
prove injurious as the Markets remain exposed to sharp corrective bouts at any
time going ahead. We strongly reiterate to keep positions and keep very high
degree of caution at higher levels. A corrective action over coming days cannot
be ruled out despite the broader trend remaining intact.
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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