Markets Are Consolidating Near Resistance; Short Term Uptrend Remains Intact While Nifty Stays Above 8200; Stay Long With Proper Stop Loss; Market Moving Towards Stable Price Movement, Provides Opportunity For Short Term Investing In Blue Chips

daily morning research report

NIFTY: Nifty had seen a decline; prices started with a minor gap up and found sellers at 8300. There is a strong resistance visible near 8300 level. On the daily charts, prices are trading just below its resistance, so if index would able to break this level decisively then it will also change the intermediate scenario. Now, the short term trend is UP, therefore we assume that the range will be resolved early next week in favor of the bulls, with higher levels possible. We had mentioned a Bearish Head & Shoulder pattern in our newsletter dated 02-Dec-2016; that pattern got cancelled as prices came higher above 8300. Hence, intermediate traders should square off their put positions with some loss. Since markets are not giving very clear patterns, we rely on our trailing stops to ensure (a) we participate in any rally that comes about, and, (b) our risk remains limited. All said and done, the Market remains upbeat. Traders should look to buy on dips. The short term trend is UP, while the intermediate trend is sideways.

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BANK NIFTY: Bank Nifty traded choppy in a narrow range but with a bullish bias. Prices started the session with a gap up of nearly 75 points at 18168.45 and went through a rally. After that, prices traded sideways for the most part but a small dip in the later stage took prices lower. However, final closing of the index was above 18250 which is a bullish sign for traders. On the daily charts, prices were inside a trading range (17800-18300) from past couple of weeks. We need a close above 18300 for the confirmation of a breakout. Today prices crossed 18300 but closed below it, so prices are at the verge of a breakout. Yesterday, we had suggested a long trade above 18250 in the anticipation of a trading range breakout and prices crossed this level. Hence, traders should be long in the index from 18250. Our view is mildly bullish in the Bank Nifty; therefore traders should look to hold these positions with a trailing stop loss at 18150. Target for this trade would come at 18650

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