MARKET TREND FOR MONDAY, JUNE 06,
2016
Markets have been in state of consolidation
once again since last two days. Today, we can once again expect the Markets to
open on a very quiet and flat note and look for directions. A flat opening is
expected and the Markets are also expected to remain under a state of
consolidation while trading in a capped range and also witnessing some amount
of volatility ingrained in it.
For today, the levels of 8260 and 8295 will
act as immediate resistance for the Markets. The supports come in at 8205 and
8165 levels.
The RSI—Relative Strength Index on the
Daily Chart is 70.7959 and it has reached its highest levels in last 14-days
which is bullish. However, it does not show any bullish or bearish divergence
and remains in “overbought” territory. The Daily MACD stays bullish as it
trades above its signal line. On the Weekly Charts, the Weekly RSI is 61.1082
and it has reached its highest value in last 14-periods which is bullish. It
does not show any bullish or bearish divergence. The Weekly MACD stays bullish
as it trades above its signal line.
On the derivative front, the NIFTY June
futures have shed over 3.26 lakh shares or 1.52% in Open Interest. The NIFTY
PCR stands unchanged at 1.05.
Coming to pattern analysis, the Markets have
been in consolidation state after it broke out from a triangle formation. The
Markets tested its logical measurable supports at 8200+ levels and since then,
it has once again consolidated in a very tight range. Refusal of the Markets to
correct after a straight rise of 450-odd points displays great underlying
strength in the Markets. However, having said this, it is important to note
that the Markets have a pattern resistance in vicinity of this range and in
event of any up move, resistance around 8220-8245 levels cannot be ruled out.
The Credit Policy review tomorrow wherein
RBI is expected to keep rates unchanged and Janet Yellen’s speech tonight which
will throw light on directional bias of the Federal Reserve’s indication to
raise rates will have some sentimental impact on the Markets. However, in any
case, it is strongly recommend avoiding shorts in the Markets and continuing to
make select purchases as secotoral and stock specific out-performance will be
seen.
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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