MARKET OUTLOOK FOR THURSDAY, FEB 08, 2018

MARKET OUTLOOK FOR THURSDAY, FEB 08, 2018

In our previous note, we had mentioned about high possibility of the Markets attempting to find a base and had also expressed high possibility the Markets may also remain bit volatile and still continue to oscillate in a range. The benchmark NIFTY50 enjoyed a relatively strong opening on Wednesday but gave up all of its gains and ended the day with a modest loss of 21.55 points or 0.21%.  Going into trade on Thursday, there are high probabilities that the Markets may again enjoy a positive opening. However, sustenance of the good start, if any, and the behavior of the Markets vis-à-vis the levels of 10500-mark will be crucial to watch for.

 The levels of 10590 and 10630 will play out as immediate resistance area for the Markets. Supports come in at 10450 and 10410 zones.

The Relative Strength Index – RSI on the Daily Chart is 35.0248 and it has formed a fresh 14-period low which is bearish. The Daily MACD is still bearish as it trades below its signal line. On the Candles, a black body emerged. In the present scenario, it does not result into any significant formation.

The pattern analysis shows that NIFTY is making evident efforts to form a bottom in the present area. After occurrence of a big white body near the 100-DMA support area, the following session resulted into a higher top and bottom. However, it would be important for the Markets to remain above the 10500-mark to attempt any pullback.

The 10480-10500 zone represents an area wherein the NIFTY struggled quite a bit in the last quarter of 2017. Therefore, while correcting from the recent highs, these levels are expected to lend support at some point of time. Therefore, the behavior of the Markets against the 10500-mark will be crucial. For any technical pullback to occur, it would be important for the Markets to remain above this mark. A bullish divergence is observed on the Daily Chart over Stochastic. Though this cannot be read singularly in isolation, it certainly exhibits attempts by the Markets to find a base. We reiterate continue making select purchases with every corrective move while adopting a cautious view on the Markets.

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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