MARKET TREND FOR FRIDAY, SEPTEMBER 23, 2016
Indian Markets, along with Global Markets reacted much
positively to the Federal Reserve’s decision to keep the rate unchanged as it
opened with a gap up and ended the day with decent gains. It is worth nothing
that the Fed’s outcome was very much on expected lines. Though the Markets are
likely to show upward bias, some possibilities of consolidation at higher
levels cannot be ruled out. Though we may see continuation of yesterday’s up
move, some amount of vigilance and caution is advised at higher levels as it
will be some time before we see any runaway rise in the Markets.
For today, the levels of 8890 and 8968 will act as immediate
resistance levels while the supports will come in at 8810 and 8730 levels.
The RSI—Relative Strength Index on the Daily Charts is
60.4174 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD still remains bearish while it trades below its signal line. On the Candles,
some contradictory reading as occurred. Yesterday’ session has seen a rising
window occurring where a top of the previous shadow is below bottom of the
current shadow and this typically implies continuation of bullish trend. On the
other hand, yesterday’s session has also seen a Spinning Top occurring.
Such session have a typically small real body and has a potential to
temporarily halt up moves. However, both of these formations require
confirmation on the following day.
On the derivative front, the NIFTY September futures have
shed over 1.94 lakh shares or 0.60% in Open Interest and this indicates minor
short covering in the Markets.
Coming to pattern analysis, the Markets have attempted to
move up again after consolidating since last four sessions. Any normal up move
will see the Markets approaching its previous immediate high of 8968 levels.
However, the overall structure on the Charts do not rule out the possibility of
the Markets consolidating before it gives any runaway rise.
All and all, though the undercurrent continue to remain
bullish some amount of consolidation before Markets show strong up move and
attempt to scale new highs cannot be ruled out.
In any case that is likely to remain range bound. It is advised to
continue to make selective stock specific purchases. IT and Banks may
consolidate from here and select MidCaps will continue to out-perform. Though
vigilant profit protection is advised at higher levels, cautious optimism is
advised for today.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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