Wednesday, August 16, 2017

MARKET OUTLOOK FOR WEDNESDAY, AUG 16, 2017

MARKET OUTLOOK FOR WEDNESDAY, AUG 16, 2017
In our Daily Market note on Monday, we had mentioned about the NIFTY taking some respite from the sharp corrective movement that it has witnessed through the entire previous week. In line with those projections, the benchmark NIFTY50 saw a gap up opening and witnessed a sharp technical pullback and ended the day with gains of 83.35 points or 0.86%. However, the coming sessions would be critically important for the Markets as the current pullback has been on back of heavy short covering. It is important that such short covering continues and subsequently gets replaced with fresh buying.

Wednesday will see the levels of 9825 and 9860 acting as immediate resistance. The supports come in at 9750 and 9685 levels.

The Relative Strength Index – RSI on the Daily Chart is 43.5271 and it is neutral showing no divergences against the price. The Daily MACD is bearish but has flattened its trajectory. On Candles, a small candle resembling a bullish belt hold has occurred. Thus usually implies continuation of the pullback.

The Pattern Analysis shows that the Markets has remained in the rising channel that it has been trading in and has held the 50-DMA as it support at the Close levels.

The VIX remains at 7-month high levels. It is also important to note that the pullback on Monday has come with reduction in the Open Interest which hints at heavy short covering. As mentioned above, it would be critical to see that this continues and we see fresh longs being built over coming days. As of now, the NIFTY has validated support at 50-DMA and the zones of 9700-9770 will be extremely critical short term support. We recommend avoiding shorts and making modest purchases with declines and continue to adopt cautious approach 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 

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.