MARKET OUTLOOK FOR WEDNESDAY, FEB 28, 2018

MARKET OUTLOOK FOR WEDNESDAY, FEB 28, 2018

Tuesday’s session remained much on expected lines as the benchmark Index NIFTY consolidated and remained within the fresh congestion area that it has formed. The Index ended the day losing 28.30 points or 0.27% after spending major part of the session in a sideways trajectory heading nowhere. Going into trade on Wednesday, we again expect a positive start to the trade. However, in the same breath, we also expect some consolidation before the NIFTY moves out of the congestion area.

The levels of 10630 and 10665 will play out as immediate resistance area for the Markets. Supports come in at 10510 and 10480 zones.

The Relative Strength Index – RSI on the Daily Chart is 48.6478. This stays neutral showing no divergence of any kind against the price. The Daily MACD is still bearish and it trades below its signal line. However, it continues to move sharply towards reporting a positive crossover. No significant formations were observed on Candles.

While having a look at pattern analysis, it remains evident that the NIFTY has continued to resist to its 50-DMA at Close. It has also resisted to its short term 20-DMA. It is also important to note that the short term 20-DMA has crossed the 50-DMA from above. This may be due to the current consolidation that we have witnessed. This also point towards the likelihood of some more consolidation happening in the Markets.

All in all, it is further important to note that the fresh congestion area that the NIFTY formed after pulling back from the immediate support area of 10276-10310 zones can be the result of either further distribution or likely accumulation. Usually any accumulation pattern is resolved by the price breaking out and moving higher. This will get confirmed only after the NIFTY comfortably moves past the 50-DMA mark. Until this happen, we will see consolidation continuing in the Markets.

The F&O data and chart pattern analysis point towards NIFTY more likely to break out and inch higher but not without some more consolidation. Given this reading, we continue to recommend making select purchases with any available minor corrective move. While keeping overall exposures modest, cautiously positive view 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 
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