Wednesday, June 8, 2016

Daily Market Trend Guide -- Wednesday, June 08, 2016

MARKET TREND FOR WEDNESDAY, JUNE 08, 2016
Markets attempted to break free of the consolidation that it was witnessing over couple of days but at the same time, it has got overbought again and some signs of complacency are clearly visible on the Charts. Today, the Markets are expected to see a flat opening, but yesterday’s high point is likely to act as immediate resistance and top for the Markets until it is comprehensively breached on the upside.

For today, 8294 and 8325 will act as immediate resistance levels for the Markets. Supports come in much lower at 8220 and 8140 levels.

The RSI—Relative Strength Index on the Daily Chart is 71.6851 and it has reached its highest level in last 14-days which is bullish. However, it now trades in “overbought” territory and shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY June futures have 6.64 lakh shares or 3.16% in Open Interest. The NIFTY PCR stands at 1.08 as against 1.06.

Coming to pattern analysis, the Markets have fortified itself over last couple of days of sideways consolidation after a robust 450-odd point’s rise that it saw while it broke out of a triangle formation. After doing this, the Markets showed no signs of any correction and instead consolidated for couple of days in a narrow range. It attempted to break out of it yesterday on the upside and it continues to track its rising pattern resistance. Today, such pattern resistance lies at 8300-8325 levels.

Overall, the Markets will continue to display strength while it tracks its pattern resistance but while doing so, it should be very clearly noted that at any given point of time, the Markets will continue to remain vulnerable to selling bouts from higher levels. The very reason that the Markets trades in “overbought” territory calls for some amount of caution. Overall, while remaining cautious with each higher levels, positive outlook is advised for today.


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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