MARKET OUTLOOK
FOR MONDAY, NOV 06, 2017
In a slightly volatile session on Friday, the benchmark
NIFTY50 recouped all of its initial losses to end the day with modest gain of
28.70 points or 0.28%. While taking a broad view of the technical structure of
NIFTY, we continue to keep our analysis on similar lines for Monday’s trade.
The Markets are overbought, but strong. In all likelihood, NIFTY is likely to
keep pushing itself for minor marginal highs but at the same will also continue
to remain vulnerable for consolidation at higher levels.
The levels we will
now watch out for at higher levels would be 10465 and 10510. Supports for the
Markets would be around 10375 and 10350 zones.
The Relative Strength Index – RSI on the Daily Chart is
71.1196. It trades slightly in overbought territory. RSI also continues to show
Bearish Divergence as RSI has not made a fresh 14-period high while the NIFTY
did so. The Daily MACD remains bullish while trading above its signal line. On
the Candles, a candle with a long lower shadow occurred. This is much similar
to a Hanging Man formation and can potentially disrupt an up move. This needs
confirmation on the following day.
The pattern analysis shows that the NIFTY, which formed a
broad rectangle formation in the 9685-10200 range is attempting to reach its
measuring implication after breaking out from this formation. It is midway and
might face some consolidation at current levels.
Overall, significant addition in Open Interest with a modest
rise shows the underlying strength in the Markets. Also, with shorts being
added with each minor downside in the Markets also provide enough cushion in
event of any consolidation of minor corrective downsides. All in all, we will
continue to see the NIFTY pushing itself for marginal highs and we recommend
chasing momentum if that happens. However, caution levels will have to be kept
at elevated levels as overall structure of the technical charts keep Markets
vulnerable to some consolidation and volatile movements at higher levels.
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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