MARKET TREND FOR THURSDAY, JUNE 16,
2016
The Markets saw a massive bout of short
covering from lower levels yesterday and filled up the gap it had created three
days back. Speaking purely on technical terms, the Markets should open on a
flat note and possibly continue with its up move. However, given the Global
Markets, there are chances that the Indian Markets may open slightly on a lower
note and remain once again under some range bound consolidation. The levels of
8060 will continue to act as support in the immediate short term.
For today, the levels of 8245 and 8295 will
act as immediate resistance levels for the Markets. The supports come in much
lower at 8120 and 8080 levels.
The RSI—Relative Strength Index on the
Daily Chart is 62.0187 and it remains neutral as it shows no bullish or bearish
divergence or any failure swing. The Daily MACD still continues to remain
bearish as it trades below its signal line.
On the derivative front, the NIFTY June
futures have shed yet another over 5.39 lakh shares or 2.82% in Open Interest.
This very clearly signifies short covering from lower levels. The NIFTY PCR
stands now at 1.14 as against 1.09.
While having a look at pattern analysis, it
becomes evident that the Markets have seen 8050-8060 zone as its immediate
support. On the same lines, the level of 8295-8300 has now become an immediate
top as well. We will not see any sustainable rise until the Markets move past
the 8300-mark. In coming days, the Brexit will continue to cast its shadow over
possibility of any such up move. Also, in the same breath, any move below
8050-8060 will trigger some more short term weakness. Until the Markets take a
directional view, we will continue to see the Markets remain range bound and in
the consolidation mode.
Overall, today as well, we will once again
see the Markets opening modestly on a lower note but may remain in
consolidation mode and up moves from lower levels cannot be ruled out. With no
structural breach on the Charts, shorts should be strictly avoided all dips
should be utilized to make fresh selective purchases. Profits too should be
protected at higher levels as good amount of volatility too would remain
ingrained in the Markets.
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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