MARKET OUTLOOK
FOR TUESDAY, DEC 19, 2017
The Indian Equity Markets witnessed immense volatility on
Monday as the benchmark NIFTY50 nearly swung 300-odd points on either side
before settling with a net gain of 55.50 points or 0.54%. The NIFTY saw a gap
down opening, directly tested the 100-DMA and then recovered form that levels
once the ruling BJP showing improved margin over the Congress. The volatility
was expected but the quantum remained much larger than expected. Tuesday will
continue to see volatility ingrained in the Markets but may continue to trade
with positive bias. The Markets witnessed huge spate of short covering from the
opening lows and this is likely to see follow-up up move on Tuesday as well, at
least in the initial trade.
The levels of 10435 and 10490 will act as major resistance
area for the Markets. Supports come in at 10350 and then at 10275 levels.
The Relative Strength Index – RSI on the Daily Chart is
58.9091 and it has marked a fresh 14-period high which is bullish. The Daily MACD
is bullish as it trades above its signal line.
The Candles showed formation of
a bullish engulfing pattern. However, the place of its occurrence makes it
relatively insignificant.
The pattern analysis shows that the Markets have managed to
move up of the falling channel that it
had created as a part of the intermediate trend. Further to this, the RSI has
broken out from a pattern in which it was marking lower tops. All this point
towards the follow up move spilling over into
Tuesday’s trade as well.
The volatility being discounted and if we look at the macro
picture, the BJP’s win will not be viewed too favorably by the Markets in the
long run. The method in which the BJP’s majority was dented as compared to 2012
will instill lot of caution into the Markets and will lead to volatile churning
of portfolios. We may see some positive bias going into trade on Tuesday, but
each moves should be used to protect profits at higher levels. Caution is
advised and we expect Markets encountering resistance once again as it
approaches 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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