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Technical Outlook: January

Nifty

Way Ahead Technical Observation:
2017
• On the monthly chart, we are observing a spinning
Going ahead, the New of the Uttar Pradesh top which gives small clue that the prior down
Year will be challenging state elections. Rumour trend is losing breath.
for Indian equity mills are abuzz with
markets owing to post news of possible hike on • On the weekly chart, we are observing a bullish
demonetization effects short-term capital gains engulfing pattern. The said pattern would get
and continuing economic or imposition of tax on activated once Nifty trades and close above 8197.
recovery in US leading long-term capital gains
to strengthening of US in the budget. This fear • On the daily chart, we are observing an upward gap
dollar. In the short term, of taxation has created area in the range of 8111 to 8114. Normally, upward
the corporate earnings widespread uncertainty gaps are continuation pattern. Hence, momentum
will be impacted due to amongst market on the upside is likely to continue where gap area is
fall in consumer demand participants which will likely to act as support going forward.
and weak consumer be only cleared once the
sentiments. Timely budget gives clarification Outlook:
rollout of GST will be on this matter. Further,
positive for our country. the dollar-rupee The multi time frame analysis suggests that the
The market has factored movement, movement monthly trend is down. However, looking at the weekly
US Fed rate hike but if in crude oil prices, and the daily time frame a bounce from current level
Fed will increase interest foreign fund inflows, cannot be ruled out. At present Nifty has resistance
rates further at a faster and upcoming corporate at 8371 – 8483 – 8612 levels whereas on the downside
pace as expected, it will earnings are also likely it has support at 7999 – 7888 – 7759 levels. In coming
increase FII’s outflows to affect equity markets. week if Nifty trades and close above 8260 level then it is
from India. We recommend investors likely to test 8371 – 8483 – 8612 levels. However, if Nifty
All the eyes will be glued to remain cautious and trades and close below 8111 level then it can test 8036 –
on the upcoming Union invest in fundamentally 7948 – 7845 levels.
Budget which will be sound companies for
unveiled on 1st February, long term perspective. Broadly, for current month 7995 – 7950 is a make or
2017 and the outcome break zone. As long as Nifty holds these levels and
at any time on the upside if it crosses 8197 on closing
basis, then the bullish engulfing pattern formed on
the weekly chart would get activated. In such scenario
Nifty may test 8371 – 8483 – 8612 levels. Hence, trade
with positive bias once Nifty trades and close above
8197. Stock specific activity is likely to continue.

5 ARIHANT CAPITAL ¡ JANUARY 2017