MARKET TREND FOR MONDAY, MAY 30, 2016
The Markets ended yet another day with
gains on Friday and today as well, it is all set to open with some more gains
and look for directions. However, at this point, we need to factor in a fact
that over last four sessions, the Markets have posted gains of 408-odd points
on Close levels and with today’s expected opening gains, the Markets would be
up nearly 450-odd points from the low point some 4 days back. This is enough
indication that the Markets may show some signs of fatigue post opening and
therefore, the intraday trajectory would be important to watch out for.
For today, the Markets are likely to have
immediate resistance at 8190 and 8240 levels. The supports come in much lower
at 8077 and 8025 levels.
The RSI—Relative Strength Index on the
Daily Chart is 69.0986 and it has reached its highest value in last 14-days
which is bullish. It does not show any bullish or bearish divergence. The Daily
MACD is bullish as it trades above its signal line. On the Weekly
Charts, the
Weekly RSI is 59.8899 and this too is bullish as it has reached its highest
value in last 14-periods.The Weekly MACD continues to remain bullish as well as
it trades above its signal line.
Coming to derivative front, the NIFTY June futures
have added over 14.52 lakh shares or 7.45% in Open Interest.
While having a look at pattern analysis,
the Markets have broken out from its triangle formation and as mentioned in our
previous edition, the logical target that we can look around is 8200 levels.
Having said this, it would be also important to factor in that the Markets will
show some signs of fatigue and this possibility cannot be ruled out given the
fact that it would have risen over 450-odd points in last 5 sessions. The
Markets have a pattern resistance around 8200-8225 levels. On the Weekly Charts
as well, the current levels show a similar pattern resistance few points from
now.
Overall, with an expected positive opening
expected, we now advice to reign in a word caution and with every up move,
emphasis should now be placed on protecting / booking profits on existing positions.
However, some select purchase may be continued to be made in select stocks as
well. Overall, continuance of 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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