MARKET OUTLOOK FOR WEDNESDAY, AUG 30, 2017
The Indian Markets had a thoroughly disappointing session on
Tuesday as it opened weak on expected lines taking cues from global markets but
got even weaker as the day progressed. It went on to test the 50-DMA and ended
a notch below it as the benchmark NIFTY50 ended with net loss of 116.75 points
or 1.18%. We now stand at a very critical juncture. The opening levels on
Wednesday would be extremely critical and any open below 50-DMA will see the
Markets resisting to it. However, in all likelihood, we expect a modestly
positive start.
Wednesday will see the levels of 9815 and 9890 playing out
as major resistance levels. Supports come in much lower at 9750 and 9685 zones.
The Relative Strength Index – RSI on the Daily Chart is 45.5010
and it remains neutral showing no divergences against the price. The Daily MACD
is bearish while trading below its signal line. On the Candle a black body
occurred. It is a large body and holds significance as it occurred near the 20-DMA
resistance area. It has reinforced the credibility of this resistance area.
The pattern analysis show that the Markets have so far
managed to cling on to the lower end of the multi-month channel that it has
been trading in. Any breach below this will bring in more weakness. The
previous low of 9685 would be extremely important level to watch for.
On one hand, NIFTY has formed a small congestion area and it
has ended a notch below 50-
DMA and therefore, it makes the level of 9685
extremely important. Any weakness from current levels will bring in more
weakness. The present structure remains slightly weaker and some chances of a
short term downward breach cannot be ruled out. However, on the other hand,
NIFTY co-relation analysis with Asian Peers shows that there are very feeble
chances of any serious weakness creeping in. While we enter the penultimate day
of expiry of current series, we expect a modestly positive start and recommend
extremely cautious outlook on the Markets.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
CMT Association (Formerly known as Market
Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA),
CANADA
Associate
International Member:
Society of Technical Analysts (STA),
UK
+91- 70164-32277
/ +91-98250-16331
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