Wednesday, June 17, 2015

Daily Market Trend Guide -- Wednesday, June 17, 2015

MARKET REPORT                                                                               June 17, 2015
The Markets saw a sharp up move in the final hour of the trade as it maintained the support at 8000-levels at Close and ended the day with modest gains. The Markets saw negative opening on expected lines and continued to trade with negative bias in a very capped and narrow range. It traded in negative territory in sideways manner and in the afternoon trade went on to form the day’s low of 7952.35. It was in the last 90-minutes of the trade that the Markets attempted to recover again. It recovered from the low point of the day and not only managed to go in to the positive territory but also formed the day’s high at 8061.85 rising over 110-odd points from the day’s low. It finally settled the day at 8047.30, posting a net gain of 33.40 points or 0.42% while forming a mildly higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, JUNE 17, 2015
Today, expect the Markets to open on a modestly positive note and there are chances that it continues with its up move, at least in the initial trade. However, the Markets have been lacking in conviction and volume and therefore it would still be critical to observe that the Markets maintains itself above the 8000-mark. Even if the Markets continue to remain in a continuing downtrend, some technical pullback is likely.
For today, the levels of 8090 and 8150 will act as immediate resistance whereas the levels of 8000 and 7950 will act as supports.
The RSI—Relative Strength Index on the Daily Chart is 40.6832 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.
On the derivative front, the NIFTY June futures have shed over 3.46 lakh shares or 2.18% in Open Interest. This signifies the up move has taken place due to short covering from lower levels. However, the total stock futures have added 2.2 crores shares in OI and the NIFTY PCR stands unchanged at 0.89.
Coming to pattern analysis the Markets have managed to hand on to the supports of 8000-levels which is acting as a minor double bottom support. Speaking purely on technical terms, the Markets are currently in intermediate downtrend and such trend typically last from three weeks to three months. The F&O data continues to show tentative fabric of the Markets but again, speaking purely on technical terms, the Markets may show some technical pullback and continue with its attempts to form a potential bottom at these levels. Therefore, the behaviour of the Markets vis-à-vis the levels of 8000-mark continues to remain critical in near future.
Overall, though the Markets have moved past the 8000-mark and trades inside its broad trading range, it has done so while shedding the Open Interest. This keeps it vulnerable to selling bouts from higher levels. The Markets will have to show some good volumes and participation which it has been lacking so for while making up moves. However, there are chances that the Markets see technical pullback even while continuing to remain in present intermediate downtrend. Continuation of cautious optimism is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

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