MARKET TREND FOR MONDAY, JUNE 20,
2016
The Markets have remained in state of
consolidation all through previous week and today as well the Markets will
continue to remain heavily under consolidation. The news of Governor Raghuram
Rajan deciding not to continue with his second term after September will have
sentimentally negative effect for the Markets. Following this, we can expect a
lower opening in the Markets and see some specific sector reacting to this.
However, this dip too is likely to get bought into and we will see the Markets
not breaking the near term pattern it has formed. This is likely to be aided by
the global markets with trades stable and positive.
For today, the levels of 8205 and 8245 will
act as immediate resistance levels for the Markets. The supports come in at
8130 and 8060 levels.
The RSI—Relative Strength Index on the
Daily Chart is 58.0418 and this remains neutral as it shows no bullish or
bearish divergence or any failure swings. The Daily MACD stays bearish as it
trades below its signal line. On the Weekly Charts, the Weekly RSI is 59.5700
and this too remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Weekly MACD remains bullish as it trades above its
signal line.
On the derivative front, the NIFTY June
futures have added 2,550 shares or 0.01% in Open Interest. This practically
keeps open interest unchanged.
Coming to pattern analysis, as mentioned
often in our previous editions, the Markets have formed its temporary top at
8294 levels and this level has now become an immediate top for the Markets.
Fresh up moves will occur only after the Markets moves past this level. Until this
happens, we will continue to see the Markets oscillating in a broad range.
However, also as mentioned often, the inherent up trend of the Markets remain
intact as of now as it continue to trades above all of its moving averages.
Markets had an important event – Brexit –
to react to this week. With developments on RBI front, it have one more sentimentally negative news to digest
and this will see a knee jerk reaction which is likely to get bought into once
we get ahead in the session. We reiterate our view to avoid shorts and use any
dips to make selective fresh purchases while vigilantly guarding profits at
higher levels.
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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