MARKET TREND FOR FRIDAY, JUNE 17,
2016
Markets recovered over 50-odd points
yesterday from the low point of the from a minor support pattern created over
past few days. Today, aided by a positive surprise on the CAD figures and
equally aided by favorable technical factors, the Markets are likely to see a
decently positive opening today. Today’s likely positive opening will see the
Markets opening towards the higher end
of the trading range formed over previous sessions and it would be important to
see if the Markets sustain expected opening gains and if they capitalise on it.
For today, the levels of 8180 and 8225 will
act as immediate resistance for the Markets. The supports come in at 8070 and
8020 levels.
The RSI—Relative Strength Index on the
Daily Chart is 56.1196 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 above its signal line. On Candles, a hammer-like candle has
occurred. Though it does not constitute a exact hammer (going by measurements,
strictly), it does potentially suggest that the temporary downsides may be
over.
On the derivative front, NIFTY June futures
have shed over over 15.12 lakh shares or 8.15% in Open Interest. This very
clearly signifies sharp short covering from lower levels and de-risking of
positions. The NIFTY PCR stands once again at 1.09 as against 1.14.
If we have a look at pattern analysis, the
Markets currently remain intact in a primary up trend as it trades above all of
its moving averages. Having said this, after breaking out on the upside from a
triangle formation, the formed a immediate top at 8290-8300 levels. After this,
as evident from the Charts, it has been consolidating. Even if we see some
downsides, but trade above 50-DMA, it would be perfectly healthy for the
Markets. However, short term pattern supports in between this exists at
8050-8070 levels. It would be important to see the Markets trading above these
levels to avoid even short term weakness.
All and all, as mentioned, the overall structures
of the Markets remain intact. It is, therefore, advice to refrain from creating
any short positions and short squeeze might keep occurring at lower
levels. On the contrary, any short term
weakness should be continued to be utilized to make very selective purchases.
Until the Markets move past 8300 levels, profits should be vigilantly protected
at higher levels. The Markets are expected to remain in a broad range with
volatility remaining ingrained in it.
Milan
Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
