Market Outlook: Nifty to remain volatile; may see profit taking at higher levels
, ET CONTRIBUTORS|
Updated: Oct 11, 2017, 08.18 PM IST
In our Wednesday’s note, we had made a categorical mention about possibilities of profit taking bouts at higher levels.
On Wednesday, the market traded precisely on those lines, as the benchmark Nifty gave up nearly 90-odd points from the intraday high and ended the day with a net loss of 32.15 points or 0.32%.
Going into trade on Thursday, we continue to expect the markets in general to remain volatile and continue to remain susceptible profit taking bouts at higher levels. However, huge amount of shorts were seen being added to the system and this will cushion the Markets on the downside in coming days. The levels of 10030 and 10065 will play out as immediate resistance area for the Markets. Supports come in at 9945 and 9910 levels.
The Relative Strength Index – RSI on the Daily Chart is 53.4260 and it remains neutral showing no divergence to the price. The Daily MACD stays bullish while trading above its signal line. An Engulfing bearish pattern has emerged on Nifty. Since this has come during an upward pullback, it may halt the up move temporarily. However, it requires confirmation on the following day.
The pattern analysis show that the Nifty has taken support on the rising trend line and this is likely to remain the crucial support area for the Nifty followed by the important 50-DMA which stands at 9943. Overall, we see the coming days remain volatile to a larger extent and all up moves are likely to remain susceptible to profit taking bouts much similar to what we witnessed on Wednesday. Having said this, given the shorts in the system, the downsides too remain limited.
Overall, as we see all these factors, we can fairly conclude that we are facing volatile but range bound days ahead. We continue to recommend adopting a highly stock specific cautious view on the Markets over coming days.
STOCKS TO WATCH | Large amounts of shorts were seen added in counters like Dish TV, SBI, ITC, Idea, PFC and Coal India. Stocks like NHPC, Infratel and HDFC, etc are likely to trade with positive bias.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. Views expressed are personal. He can be reached at milan.vaishnav@equityresearch.asia)
On Wednesday, the market traded precisely on those lines, as the benchmark Nifty gave up nearly 90-odd points from the intraday high and ended the day with a net loss of 32.15 points or 0.32%.
Going into trade on Thursday, we continue to expect the markets in general to remain volatile and continue to remain susceptible profit taking bouts at higher levels. However, huge amount of shorts were seen being added to the system and this will cushion the Markets on the downside in coming days. The levels of 10030 and 10065 will play out as immediate resistance area for the Markets. Supports come in at 9945 and 9910 levels.
The Relative Strength Index – RSI on the Daily Chart is 53.4260 and it remains neutral showing no divergence to the price. The Daily MACD stays bullish while trading above its signal line. An Engulfing bearish pattern has emerged on Nifty. Since this has come during an upward pullback, it may halt the up move temporarily. However, it requires confirmation on the following day.
The pattern analysis show that the Nifty has taken support on the rising trend line and this is likely to remain the crucial support area for the Nifty followed by the important 50-DMA which stands at 9943. Overall, we see the coming days remain volatile to a larger extent and all up moves are likely to remain susceptible to profit taking bouts much similar to what we witnessed on Wednesday. Having said this, given the shorts in the system, the downsides too remain limited.
Overall, as we see all these factors, we can fairly conclude that we are facing volatile but range bound days ahead. We continue to recommend adopting a highly stock specific cautious view on the Markets over coming days.
STOCKS TO WATCH | Large amounts of shorts were seen added in counters like Dish TV, SBI, ITC, Idea, PFC and Coal India. Stocks like NHPC, Infratel and HDFC, etc are likely to trade with positive bias.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. Views expressed are personal. He can be reached at milan.vaishnav@equityresearch.asia)
