Markets Pause After A Good Weekly Sprint; Nifty Faces Resistance Around 8450; Short Term Trend Is Still Up; Index May Enter Into A Trading Range With Support Near 8300; Banks Are Without Direction – Avoid Them For Now.

Stock Markets

NIFTY: After three days of gains, the Nifty finally decided to take a pause and rest. The Nifty closed at 8400.35, down 6.85 points (-0.08%). Such declines should be considered normal after large, blistering gains, so no damage done to the Nifty’s short term trend. This trend remains UP. However, we do not know the future, and, we cannot say what direction the Index will take in the next few days. The short term trend is UP, while the Intermediate trend is sideways. The Nifty needs sustained gains to ensure that the intermediate trend turns UP. We had anticipated a trading range with the boundaries seemed to be 8450 as resistance and 8300 as support. Index started with a gap up but again found resistance at 8450 and closed lower. So, day’s price action strengthens our view. We do not know in which direction the break out will be but momentum will pick up once again only when Nifty breaks out of this range of 150 points. Traders should wait patiently for a sustained breakout out of this range before making any large directional bets.
market details 13 Jan 2017
BANK NIFTY: Bank Nifty had again a narrow range day in the markets; prices started the session with a gap up near 18950 and made an intraday high just above it. Prices then came lower and found support at 18750 but recovery from there helped index to close near the yesterday’s close above 18900. After a rally of nearly 8 percent which took index from a recent low of 17600 to 18950, there is a strong chance that the Nifty will go into a huddle, essentially contracting inside a trading range. The range boundaries, as of now, seem to be 19100 as resistance and 18700 as support. A breakout on either side may give us another directional move. Scanning through the current scenario, probable outcome should be on the upper side breakout. Whether there is a breakout on upside or downside we should stick to our discipline in trading, that is the only attribute to stay in the market with gains. A breakout on either side will also give us a new trading opportunity but as far as prices are trading choppy inside a narrow range; traders should step aside and watch the market action from outside.

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