MARKET TREND FOR THURSDAY, JUNE 02,
2016
Markets displayed good amount of strength
yesterday but remained within the range defined in our yesterday’s edition of
Daily Market Trend Guide. Today, we are likely to see a quiet to modestly
negative opening in the Markets and the Markets are likely to continue to
remain in consolidation mode. The levels of 8200-8235 will continue to act as
immediate resistance zones for the Markets and fresh up move shall occur only
beyond these levels.
For today, the levels of 8200 and 8235 will
continue to act as immediate resistance levels for the Markets. The supports
come in lower at 8120 and 8075 levels.
The RSI—Relative Strength Index on the
Daily Charts is 69.1181 and this is neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it trades
above its signal line. On the Candles, after formation of Engulfing Pattern a
day before, a long Upper Shadow occurred yesterday. This continues to
signify a potential halt in the current up move.
Coming to derivative front, the NIFTY June
futures have shed over 1.30 lakh shares or 0.60% in Open Interest. The NIFTY
PCR stands at 1.02 as against 1.04 yesterday.
While having a look at pattern analysis,
the Markets are taking a breather after a stupendous up move of over 430-odd
points after it broke out from a consolidation formation. Having done this, it
tested its logical targets of 8200 levels and has been consolidating since
then.
Today as well, it is likely to continue to consolidate and the zones of
8200-8235 will continue to act as resistance zones for the Markets as there are
couple of resistance points here. Fresh up move can be expected only after the
Markets moves past 8250 levels. The F&O data and the overall structure of
the Charts depict a clear possibility of the Markets continuing to remain in
consolidation for some more time.
Overall, though shorts at these levels
should be avoided, emphasis should be laid on protecting profits on current
positions in event of any up moves that we witness until the Markets moves past
8250 levels. Some amount of sector and stock specific out performance will be
seen. Overall, a range bound movement with some amount of volatility ingrained
in it cannot be ruled out.
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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