MARKET OUTLOOK
FOR WEDNESDAY, DEC 06, 2017
In our previous note, we had expected 100-DMA to stand as
important support for the Markets and had also not expected the Markets to show
any runaway rise. In line with this analysis, the benchmark NIFTY recovered
smartly from the lows of the day taking support at the levels very near to
100-DMA. It ended the session with minor loss of 9.50 points or 0.09%. Going
into trade on Wednesday, the broader levels to watch for remain the same.
Critical support is expected at the 100-DMA which stands today at 10070 while
up moves will face resistance in the 10180-10200 zones.
Given these resistance levels of 10180-10200 zones, any
movement past these levels will see some short term momentum in the Markets. We
expect a modestly positive to flat start to the day on Wednesday and the
Markets are expected to attempt an technical pullback after finding base around
current levels.
The Relative Strength Index – RSI on the Daily Chart is 37.9889
and it has marked its lowest value in last 14-days which is bearish. It shows
no divergence against the price. The Daily MACD stays bearish while trading
below its signal line.
On the candles a Doji has emerged. Occurrence of Doji can be
significant and not-so-significant depending upon the place of its occurrence. The
current formation of a Doji is relatively significant because of two reasons.
The NIFTY has tested its lower Bollinger Band value and also this coincides
with the 100-DMA which is a major support level for the Market in the immediate
short term. Reading the occurrence of Doji in this context, we can expect it to
cause a technical pullback.
The Markets in general will also react to RBI’s Monetary
Policy Review. RBI is expected to keep the rates unchanged and skip this time
and lower it due to current inflation levels. But this being aside, it is very
much likely that the Markets may continue to remain in a range with a bias
towards some pullback. In event of any downsides, the levels of 100-DMA will
act as a potent support. Continuing to remain highly stock specific and
maintaining modest exposures is what 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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