MARKET OUTLOOK FOR MONDAY, JAN 29, 2018

MARKET OUTLOOK FOR MONDAY, JAN 29, 2018

The benchmark Index NIFTY50 saw less volatility than what was expected on the expiry day of the December series. However, it did see a modest corrective move in the first half of the session. However, the Index saw a 60-point recovery to end the day with a modest loss of 16.35 points or 0.15%. Markets will go into the trade on Monday with a long weekend following a trading holiday on Friday. Though the indicators are overbought all over, we expect the Markets to attempt a modestly positive opening once again. The Asian Markets, especially the Hang Seng ended with gains on Friday and we expected NIFTY will follow suit.

However, this being said, we cannot at any point ignore the overbought nature of the Markets and that fact that we will face one of the most important domestic event that of Union Budget later this week. The levels of 11110 and 11135 will play out as major resistance area for the Markets. Supports come in lower at 10965 and 10930 zones.

The Relative Strength Index – RSI on the Daily Chart is 80.5369 and it stay neutral against the price. However, it trades in the overbought territory. The Daily MACD remains bullish while trading above its signal line. A candle with a long lower shadow has emerged. This has little significance at current position but can temporarily halt an up move.

The pattern analysis shows that after breaking above the 10490-mark,  the NIFTY has achieved its measured targets and is now expected to take a minor breather with the level of 11,110 acting as immediate resistance.

Overall, though some early positive movement in the Markets cannot be ruled out, we might see some intermittent corrective bouts happening at higher levels. Broader markets may see some relatively more pain in event of any corrective activity taking place from higher levels. However, with the uptrend remaining firmly in place, we do not recommend creating any significant short positions. Instead, all sharp up moves should be continued to be utilized in protecting profits 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 
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