MARKET TREND FOR TUESDAY, JUNE 14,
2016
While trading very much on expected lines,
the Markets yesterday recovered some 50-odd points from the low point of the
day but still ended the day with losses. Today, we can once again expect the
Markets to open on a modestly negative note and look for directions but the
yesterday’s low level of 8063 is likely to hold as support. Though the Markets
are expected to continue to remain in corrective mode, it is more likely to
remain range bound as well.
For today, the levels of 8130 and 8175 will
act as immediate resistance levels for the Markets. The supports come in at
8060 and 8010 levels.
The RSI—Relative Strength Index on the
Daily Chart is 55.7400 and it has just reached its lowest value in last 14-days
which is bearish. The RSI has set a fresh 14-period low while NIFTY has not yet
and this is bearish divergence. The MACD too has reported a negative crossover
and it is now bearish as it trades below its signal line. On the Candles, a falling window (gap) has occurred. This
occurring with the previous two candles also being black, makes charts little
weaker.
On the derivative front, the NIFTY June
futures have shed over 7.28 lakh shares or 3.39% in Open Interest. The NIFTY
PCR stands at 1.11 as against 1.12.
Coming to pattern analysis, the Markets are
now showing signs of correction after a stupendous 450+ points of up move.
After making an immediate top at 8294, the Markets have shown some corrective
tendency. If we draw a trend line from the lows it made in February, the
Markets may see some 50-100-odd points of modest downsides left before it
attempts of find foot again. With this, the levels of 8000 may be important to
watch out for. If the current levels are breached, then the Markets testing the
50-DMA cannot be ruled out.
Overall, in the scenario described above,
in any case, there will be no structural breach on the Charts even if the Markets
tests its critical supports mentioned above. It would be a healthy correction
and most of the dips will be bought into. We continue to reiterate to use all
upsides until the levels of 8294 to book and protect current profits. Shorts
should be avoided but as the Markets are likely to continue to see a range bound
consolidation and movements.
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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