MARKET OUTLOOK
FOR TUESDAY, NOV 14, 2017
The Indian Equity Markets had a weak start to the trading
week as the benchmark NIFTY50 ended the day losing 96.80 points or 0.94%. The
first half of the session on Monday remained weak and the second half even
weaker as the Index rapidly lost ground. With the current Close levels of 10224.95,
the Index has given up nearly 90% of the gains it achieved after breaking out
from 10200 levels. Going into trade on Tuesday, the levels of 10200 would be
critical to watch out for. It would be extremely necessary for the Markets to
take support around 10180-10200 zones. This was the major resistance level that
the NIFTY had cleared and during this corrective phase, these levels are
supposed to act as major support.
The levels of 10290 and 10325 will play out as important
resistance levels in event of an up move. The supports come in at 10180 and
10110 zones.
The Relative Strength Index – RSI on the Daily Chart is 48.5363
and it has reached its lowest value in last 14-period which is bearish. RSI
does not show any divergence against the price. The Daily MACD is bearish as it
is trading below its signal line. An Engulfing Bearish Pattern has emerged. It
has emerged after a significant decline and therefore it can mark a reversal.
The pattern analysis shows that the after several weeks of
remaining in a trading range in a rectangle formation, the NIFTY achieved a
upward breakout from 10200 levels. However, with the Monday’s decline, it has
given back nearly 90% of its gains and has suffered a near 100% throwback.
All in all, it is beyond doubt that the level of 10200 would
remain a very important level to watch for. The Market is strongly expected to
take support at the 10180-10200 zones and attempt a pullback. Any dip below
this may see the Markets testing its 50-DMA. However, given the amount of
shorts in the system and indicated by some lead indicators, this may be
unlikely and the Markets may attempt a technical pullback. Any significant dip
below 10200 would warrant an attention and until this happens, we can continue
to utilize all the downsides in making stock specific purchases.
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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