MARKET OUTLOOK FOR TUESDAY, OCT 17, 2017
Monday’s trading session saw yet another day of surge in NIFTY as
the benchmark Index marked yet another life time high while ending the day with
gains of 63.40 points or 0.62%. With Monday’s close, the NIFTY has attempted to
give a fresh breakout from a rectangle trading range that it has formed over
past couple of weeks. In all probability, we may see Markets opening positive
and continuing with its up move on Tuesday. However, at the same time, the lead
indicators have continued to suggest the heightened levels of caution with
which we need to approach the Markets.
The levels of 10250 and 10295 will act as immediate resistance
levels for the Markets. Supports come in much lower at 10150 and 10060 zones.
The Relative Strength Index – RSI on the Daily Chart is 67.4723
and it has reached its highest value in last 14-days which is bullish. It does
not show any divergence against the price. The Daily MACD remains bullish as it
trades above its signal line. No significant formations were observed on
Candles.
The pattern analysis suggest that the Index is attempting to break
out on the upside from the broad rectangle formation trading range that it has
formed over past couple of days. However, this will need confirmation on the
next trading day.
If we take a broader look at the current structure of the Markets,
we cannot dispute the fact that the undercurrent is extremely buoyant and the
NIFTY has attempted to give a breakout from a broad trading range that it has
been trading in since last couple of weeks. However, at the same time, we
cannot also ignore the fact that the lead indicators on the Daily and Weekly
Charts are showing divergent signals. Also, VIX remains at its lowest in recent
times couple with very high NIFTY PCR (Put to Call Ratio). Taking into account
all of these factors, we recommend exercising very high degree of caution and
utilize all up moves for protection of profits while keeping fresh purchases at
very modest levels. Highly cautious outlook is advised for the day.
Milan Vaishnav, CMT, MSTA
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
Society of Technical Analysts (STA),
UK
+91- 70164-32277 / +91-98250-16331
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