MARKET TREND FOR FRIDAY, SEPTEMBER 02, 2016
While trading perfectly on analyzed lines, the Markets
consolidated after 3 days of gains and ended the day with minor losses after
coming off from its intraday highs. The levels of 8820 mentioned yesterday
acted as resistance intraday. Today, on Friday, we once gain expect the Markets
to continue to consolidate its gains and continue to trade in a capped range.
The session is expected to remain range bound.
For Friday, the levels of 8820 and 8850 will continue to act
as immediate resistance levels for the Markets. The supports will continue to
exist at 8750 and 8720 levels.
The RSI – Relative Strength Index on the Daily Chart is
63.8215 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD stays bullish as it trades above its signal
line.
On the derivative front, the NIFTY September futures have
added over 6.10 lakh shares or 1.82% in Open Interest. The NIFTY PCR stands at
1.02 as against 1.10 yesterday.
Coming to pattern analysis, the Markets have continue to
exhibit lot of strength as it showed no decline but consolidated after of 215-odd
point of gains. This strength was evident as the Markets showed very limited
declines and remained in a very narrow and capped range. The Markets have
confirmed its breakout that occurred above the levels of 8728, a immediate top
that was formed in the first week of August. Having said this, it becomes
important to note that the undercurrent in the Equity Markets continues to
remain buoyant and the Markets will continue to see some consolidation in the
immediate term while exhibiting lot of internal strength. We expect such
consolidation to occur in the form of intermittent selling bouts from higher
levels but the overall decline is likely to remain limited.
Overall, in event of any decline, the level of 8700-8728
will continue to lend immediate support to the Markets. The expected range
bound movement for the Markets will in fact lay further strength for the
Markets to continue with its up move in coming days. Any declines or
intermittent intraday selling bouts should be continued to be used to make
fresh purchases. As mentioned yesterday by us, Sectoral shift and out
performance will continue and we will see BANKNIFTY, PSUBANK, ENERGY and AUTO
Stocks outperforming the broader Markets and providing good entry points.
However, we may see some caution reigning in as well with Monday being a
Holiday on account of Ganesh Chaturthi.
Milan Vaishnav, CMT
Technical Analyst
Research Analyst ((SEBI Reg. No. INH000003341)
Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331 / +91- 70164-32277
