Thursday, June 23, 2016

Daily Market Trend Guide -- Thursday, June 23, 2016

MARKET TREND FOR THURSDAY, JUNE 23, 2016
The Markets have continued to remain in a ranged session yesterday as well while it ended marginally in the red. Today’s analysis once again continue to remain on similar lines as the markets are likely to continue to remain in a capped range given the pendency of Brexit vote which is later today. Today, we can expect the Markets to open on a flat to mildly positive note and look for directions and the levels of 8260 will continue to act as immediate resistance levels for the Markets. The Markets are not likely to take a definite directional move and will react to the Brexit outcome tomorrow.

For today, the levels of 8260 and 8295 will act as immediate resistance levels for today. On the downsides, supports exist at 8180 and 8140 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.8794 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 13.33 lakh shares or 7.89% in Open Interest. This clearly shows some reduction in positions yesterday in the system.

Coming to pattern analysis, after forming a immediate top of 8295 levels, the Markets have now been consolidating in a broad range since last 12 sessions and have made another lower top, tentatively at 8260 levels. Having said this, today as well, we will continue to see the Markets consolidating in the first half of the session. The second session might remain volatile as participants will try to adjust their trades preparing for the Brexit outcome tomorrow. Having said this, in event of any downsides, the likely supports for the Markets can be the rising trend line drawn from the February lows and after that the 50-DMA. In case of any eventuality, the Markets may not see any damage beyond this.

Overall, so far as today is concerned, it is best advised to refrain from taking any major trades today. As always, exposures to be kept at minimum levels and more emphasis should be laid on preservation of cash. Shorts to be thoroughly avoided and any dips should be continued to be utilized to make very selective purchases. Overall, cautious outlook is advised for today.


Milan Vaishnav, CMT
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331

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