Thursday, September 22, 2016

Daily Market Trend Guide -- Thursday, September 22, 2016

MARKET TREND FOR THURSDAY, SEPTEMBER 22, 2016
We had mentioned about possibility of the Markets remaining choppy yesterday. Keeping in line with the analysis, the Indian Equity Markets had a volatile and choppy session while it ended on absolutely flat note after coming off nearly 50-odd points from the high point of the day. Today, we will see the Markets trading purely on technical parameters and some amount of fatigue remains evident on the Daily Charts. Though BoJ move on not reducing interest rates and making some adjustments in the stimulus remained a non-event, consolidation is likely to continue if we speak purely on technical terms.

For today, the levels of 8830 and 8865 will remain immediate resistance levels for today. The levels of 8730 and 8680 will remain immediate support for the markets.

The RSI—Relative Strength Index on the Daily Chart is 54.0819 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish trading below its signal line.
On the derivative front, the NIFTY September futures have added over 1.31 lakh shars or 0.41% in Open Interest.

Looking at pattern analysis makes one thing quite evident that the Markets have consolidated in a narrow range over last four sessions. It is also worth noting that after making an immediate top of 8968 on the Daily Charts and after showing 100% throwback to 8700-8730 zones from where the Markets broke out, the level of 8847 has become a lower top for the Markets. In other words, it would be critically important for the Markets to move past the level of 8850 to remain in sideways consolidation. Any failure to do so and any drift towards 8700 levels will see some short term negative bias.

Overall, Federal Reserve not rising rates has been largely discounted for. Any negative surprise of Fed rising the rate will certainly have negative effect. However, if the Fed keeps the rate unchanged as widely expected, we will see equity markets will see themselves being ruled purely by technical factors. Though sectors like IT, Metals and select Mid Caps will continue to out-perform, cautious view on the Markets 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


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