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
