MARKET TREND FOR TUESDAY, JUNE 21,
2016
The Markets relatively outperformed
yesterday as compared to its global peers but overall traded precisely on
expected lines as it opened low but recovered during the session to end with
gains. Today, we can fairly expect the Markets to open on a quiet note and look
for directions. The Markets have remained in a range and have not reported any
break out on the upside and therefore we can once again expect it to
consolidate in a given range with the levels of 8295 continuing to act as
immediate top.
For today, the levels of 8250 and 8295 will
act as immediate resistance levels for the Markets. The supports come in much
lower at 8170 and 8115 levels.
The RSI—Relative Strength Index on the
Daily Chart is 62.1796 and it remains neutral as it shows no bullish or bearish
divergences or any failure swings. The Daily MACD stays bearish as it trades
below its signal line. On the Candles, an engulfing bullish line has
occurred.
However, if this occurs during an uptrend, which happens to be the
case with NIFTY, it marks a potential top. However, this needs confirmation. In
any case, the levels of 8295 continue to remain an immediate top for the
Markets.
On the derivative front, the NIFTY June
futures have added over 4.16 lakh shares or
2.44% in Open Interest. This signifies creation of fresh long positions
in the Markets.
While having a look at pattern analysis,
the Markets continue to remain in a broad trading range with the levels of 8050-8070
acting as supports and the level of 8295 marking an immediate top. The Markets
currently continues to trade above all of its major moving averages but is yet
to give any breakout on the upside. A fresh significant and sustainable up move
shall occur only after the Markets move past 8295 levels. In between that, it
will have volatility induced by Brexit to deal with. In any case, it is likely
to remain in a broad trading range given the prescribed parameters.
Overall, we continue to reiterate our view
to avoid shorts as there is no structural indications to do so. However,
profits at every high level until a breakout is achieved should be vigilantly
protected as the recent up moves have come without FII participation and
relatively weak market breadth. With the bright chances of Markets remaining in
a broad range with some amount of volatility ingrained in it, moderate
exposures with preservation of cash is advised.
Milan Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
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