Gemstone Equity Research & Advisory Services

Thursday, June 16, 2016

Daily Market Trend Guide -- Thursday, June 16, 2016

MARKET TREND FOR THURSDAY, JUNE 16, 2016

The Markets saw a massive bout of short covering from lower levels yesterday and filled up the gap it had created three days back. Speaking purely on technical terms, the Markets should open on a flat note and possibly continue with its up move. However, given the Global Markets, there are chances that the Indian Markets may open slightly on a lower note and remain once again under some range bound consolidation. The levels of 8060 will continue to act as support in the immediate short term.

For today, the levels of 8245 and 8295 will act as immediate resistance levels for the Markets. The supports come in much lower at 8120 and 8080 levels.

The RSI—Relative Strength Index on the Daily Chart is 62.0187 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed yet another over 5.39 lakh shares or 2.82% in Open Interest. This very clearly signifies short covering from lower levels. The NIFTY PCR stands now at 1.14 as against 1.09.

While having a look at pattern analysis, it becomes evident that the Markets have seen 8050-8060 zone as its immediate support. On the same lines, the level of 8295-8300 has now become an immediate top as well. We will not see any sustainable rise until the Markets move past the 8300-mark. In coming days, the Brexit will continue to cast its shadow over possibility of any such up move. Also, in the same breath, any move below 8050-8060 will trigger some more short term weakness. Until the Markets take a directional view, we will continue to see the Markets remain range bound and in the consolidation mode.

Overall, today as well, we will once again see the Markets opening modestly on a lower note but may remain in consolidation mode and up moves from lower levels cannot be ruled out. With no structural breach on the Charts, shorts should be strictly avoided all dips should be utilized to make fresh selective purchases. Profits too should be protected at higher levels as good amount of volatility too would remain ingrained in the Markets.

Milan Vaishnav,

Consulting Technical Analyst

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

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Wednesday, June 15, 2016

Daily Market Trend Guide -- Wednesday, June 15, 2016

MARKET TREND FOR WEDNESDAY, JUNE 15, 2016

Expect the Markets to open on a modestly positive note and look for directions and attempt and find some stability. The Markets have traded precisely on analyzed lines yesterday and the levels of 8050-8060 have held out as support twice. These levels would be again critically important to watch out for and it would be important for the Markets to maintain themselves above these levels. If the Markets breach these levels, then the possibility of it testing its 50-DMA would increase.

For today, the levels of 8140 and 8175 will act as immediate resistance levels or the Markets. The supports come in at 8050 and 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.5830 and it has reached its lowest value in last 14-days which is bearish. RSI has set a fresh 14-period low while NIFTY has not yet and this is Bearish Divergence. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 16.42 lakh shares or 7.92% in Open Interest. The NIFTY PCR stands at 1.09 as against 1.11 yesterday.

While having a look at pattern analysis, the Markets have been consolidating post forming high of 8294. However, while doing so, it has created a gap between 8162-8070 levels. This zone is likely to act as some minor resistance when the Markets try to pull back. However, having said this, it is important to note that the Markets have attempted to take support twice at 8050-8060 levels and therefore, these levels become very important short term support. It would be critically important for the Markets to trade above this level and breach on the downside will see some more weakness creeping in. If this happens, then the possibility of the Markets testing its 50-DMA cannot be ruled out.

All and all, the Markets continue to remain in consolidation mode and this continues to keep our analysis on similar lines as that of yesterday. The Markets are likely to remain range bound with some amount of volatility remaining ingrained in it. The levels of 8050 should be watched out for and until then all downsides should be utilized to make selective purchases.