MARKET TREND FOR FRIDAY, MAY 27, 2016
The Markets had a breakout yesterday and a
day of yet another robust gain as it ended on a high note yesterday. Today, we
can once again expect the Markets to open on a modestly positive note and look
for directions. It is important to note that the Markets have gained over 320-odd
points in two sessions and therefore some consolidation at higher levels cannot
be ruled out. In fact, such consolidation is likely to be healthy in the long
run.
For today, the levels of 8095 and 8165 will
act as immediate resistance levels for the Markets. The supports come in lower
at 7950 and 7910 levels.
The RSI—Relative Strength Index on the
Daily Chart is 65.65.7510 and it has reached its highest value in last 14-days
which is bullish. It does not show any bullish or bearish divergence on the
Charts. The Daily MACD has reported a bullish crossover and is now bullish as
it trades above its signal line.
On the derivative front, the NIFTY June
series have added over 46.01 lakh shares or 30.90% in total Open Interest.
Coming to pattern analysis, the Markets
have given a breakout after consolidating in a triangle for nearly a month.
After resisting at its 200-DMA for couple of times and after oscillating with a
support at its 50-DMA the Markets have broken out on the upside yesterday.
Having said this, the technical structure and the lead indicators suggest
likelihood of continuation of momentum on the Daily Charts. However, given the
fact that the Markets have gained over 320-odd points in two straight sessions
some amount of consolidation still cannot be ruled out. Speaking purely on
technical grounds logical target of 8200 levels cannot be ruled out with lower
band support of 7910.
Overall, momentum is likely to continue but
at the same time some amount of consolidation cannot be ruled out. It is
advised to completely avoid shorts at any nature continue to make selective
purchases. Out performance from leading sectors will be seen as they are likely
to support the overall momentum of the Markets. Positive outlook is advised for
today.
Milan
Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
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