Market Outlook: Nifty supports shift lower; exercise caution at higher levels
, ET CONTRIBUTORS|
Updated: Oct 17, 2017, 08.31 PM IST
Post attempting breakout in the previous session, the market deliberated on Tuesday as the benchmark Nifty50 headed nowhere and oscillated in the narrow 25-point range throughout the session.
It ended the day with a minor gain of 3.60 points or 0.04 per cent. As mentioned in our previous note, the levels of 10,250 played out as resistance area for the market.
Wednesday is likely to see a quiet opening but as mentioned often in our previous notes, the current structure of the market warrants extreme caution as we deal with the marginal highs that the Nifty is giving each day.
The levels of 10,250 and 10,310 will play out as immediate resistance area for the market. Supports come in much lower at 10,140 and 10,075 zones.
The Relative Strength Index – RSI on the Daily Chart is 67.8221 and it has market a fresh 14-period high once again which is bullish. The Daily MACD stays bullish while trading above its signal line.
The pattern analysis of the market shows very tentative mood and caution at higher levels. In normal circumstance, after an attempted breakout from the broad trading range, Nifty should have continued with the upmove on Tuesday. But instead it deliberated and headed nowhere and showed signs of consolidation at higher levels.
While taking a pure technical view on the market, it currently appears highly cautious.
The high level of caution and even higher hedged activities are evident from the Nifty-PCR (Put to Call Ratio), which currently remains at multi-year high near 1.70.
In view of this, despite buoyant under-current, we would still should a word of caution and would point out at the market continue to remain vulnerable to profit taking at higher levels before it achieves a clean break out.
We would recommend keeping exposures at modest levels and continue to utilise up moves in protecting profits.
STOCKS TO WATCH | Strong set up is observed in stocks like Syndicate Bank, Apollo Tyres, DB Corp, Inox Wind, Hindustan Copper and Usha Martin. We may see these stocks trading in green on Wednesday.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
It ended the day with a minor gain of 3.60 points or 0.04 per cent. As mentioned in our previous note, the levels of 10,250 played out as resistance area for the market.
Wednesday is likely to see a quiet opening but as mentioned often in our previous notes, the current structure of the market warrants extreme caution as we deal with the marginal highs that the Nifty is giving each day.
The levels of 10,250 and 10,310 will play out as immediate resistance area for the market. Supports come in much lower at 10,140 and 10,075 zones.
The Relative Strength Index – RSI on the Daily Chart is 67.8221 and it has market a fresh 14-period high once again which is bullish. The Daily MACD stays bullish while trading above its signal line.
The pattern analysis of the market shows very tentative mood and caution at higher levels. In normal circumstance, after an attempted breakout from the broad trading range, Nifty should have continued with the upmove on Tuesday. But instead it deliberated and headed nowhere and showed signs of consolidation at higher levels.
While taking a pure technical view on the market, it currently appears highly cautious.
The high level of caution and even higher hedged activities are evident from the Nifty-PCR (Put to Call Ratio), which currently remains at multi-year high near 1.70.
In view of this, despite buoyant under-current, we would still should a word of caution and would point out at the market continue to remain vulnerable to profit taking at higher levels before it achieves a clean break out.
We would recommend keeping exposures at modest levels and continue to utilise up moves in protecting profits.
STOCKS TO WATCH | Strong set up is observed in stocks like Syndicate Bank, Apollo Tyres, DB Corp, Inox Wind, Hindustan Copper and Usha Martin. We may see these stocks trading in green on Wednesday.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
