MARKET OUTLOOK FOR WEDNESDAY, OCT 18, 2017
Post attempting breakout in the previous session, the Markets
deliberated on Tuesday as the benchmark NIFTY50 headed nowhere and oscillated in
the narrow 25-point range all throughout the session. It ended the day with minor
gains of 3.60 points or 0.04%. As mentioned in our previous note, the levels of
10250 played out as resistance area for the Markets. Wednesday is likely to see
a quiet opening but as mentioned often in our previous note, the current
structure of the Markets warrants extreme caution as we deal with the marginal
highs that the NIFTY is giving each day.
The levels of 10250 and 10310 will play out as immediate
resistance area for the Markets. Supports come in much lower at 10140 and 10075
zones.
The Relative Strength Index – RSI on the Daily Chart is 67.8221
and it has market a fresh 14-period high once again which is bullish. The Daily
MACD stays bullish while trading above its signal line.
The pattern analysis of the Markets shows very tentative mood and
caution at higher levels. In normal circumstance, after a attempted breakout
from the broad trading range, NIFTY should have continued with the up move on
Tuesday. But instead it deliberated and headed nowhere and showed signs of consolidation
at higher levels.
While taking a pure technical view on the Markets, the Markets
currently appear highly cautious. The high level of caution and even higher hedged
activities are evident from the NIFTY PCR (Put to Call Ratio) which currently
remains at multi-year high near 1.70. In view of this, despite buoyant under-current,
we would still should a word of caution and would point out at the Markets
continue to remain vulnerable to profit taking at higher levels before it
achieves a clean break out. We would recommend keeping exposures at modest
levels and continue to utilize up moves in protecting profits.
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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