Tuesday, August 30, 2016

Daily Market Trend Guide -- Tuesday, August 30, 2016

MARKET TREND FOR TUESDAY, AUGUST 30, 2016
The Markets traded precisely on analyzed lines yesterday as the opening and the early morning lows acted as major support for the Markets. The Markets rose over 75-odd points from the lows of the day to end the day with modest gains. Today, we can fairly expect the Markets to open on a positive note and continue with its up move at least in the initial trade. Yesterday’ support has kept the Markets into the congestion zone once again and we will see the Markets in this area with positive bias.

For today, the levels of 8640 and 8675 will act as immediate resistance levels for the Markets. The supports come in at 8580 and 8530 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.1590 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY September futures have added over 4.63 lakh shares in Open Interest. The NIFTY PCR stands at 1.05 as against 1.04 yesterday.

On the pattern analysis front, we had very strongly expected the Markets to take support around 8520-8530 levels. The Markets did take support around these levels and therefore kept themselves in the narrow consolidation zone that it has been trading in since beginning of August. Having said this, the levels of 8530-8520 will continue to act as important immediate support levels for the Markets. The Markets will continue to consolidate so long as they trade above these levels. If these levels are breached, we may see the Markets testing its 50-DMA. On the upper side, the levels of 8700-8728 will continue to act as immediate resistance for the Markets. No amount of pullbacks will see the runaway rise in the Markets until they move past these 8700-8728 levels comprehensively.

Overall, though the Markets have shown good amount of volatility ingrained in it, the inherent buoyancy remains intact. On the other hand, with the Markets yet to move past its critical resistance levels, such intermittent bouts will continue to exist and this will keep the Markets in a capped range and under consolidation with some volatility accompanying it. All dips should be utilized to make fresh purchases so long as the Markets are trading above mentioned critical support levels.


Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331

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