MARKET TREND FOR WEDNESDAY, JUNE 15,
2016
Expect the Markets to open on a modestly
positive note and look for directions and attempt and find some stability. The
Markets have traded precisely on analyzed lines yesterday and the levels of
8050-8060 have held out as support twice. These levels would be again
critically important to watch out for and it would be important for the Markets
to maintain themselves above these levels. If the Markets breach these levels,
then the possibility of it testing its 50-DMA would increase.
For today, the levels of 8140 and 8175 will
act as immediate resistance levels or the Markets. The supports come in at 8050
and 8010 levels.
The RSI—Relative Strength Index on the
Daily Chart is 55.5830 and it has reached its lowest value in last 14-days
which is bearish. RSI has set a fresh 14-period low while NIFTY has not yet and
this is Bearish Divergence. The Daily MACD remains bearish as it trades below its
signal line.
On the derivative front, the NIFTY June
futures have shed over 16.42 lakh shares or 7.92% in Open Interest. The NIFTY
PCR stands at 1.09 as against 1.11 yesterday.
While having a look at pattern analysis,
the Markets have been consolidating post forming high of 8294. However, while
doing so, it has created a gap between 8162-8070 levels. This zone is likely to
act as some minor resistance when the Markets try to pull back. However, having
said this, it is important to note that the Markets have attempted to take
support twice at 8050-8060 levels and therefore, these levels become very
important short term support. It would be critically important for the Markets
to trade above this level and breach on the downside will see some more weakness
creeping in. If this happens, then the possibility of the Markets testing its
50-DMA cannot be ruled out.
All and all, the Markets continue to remain
in consolidation mode and this continues to keep our analysis on similar lines
as that of yesterday. The Markets are likely to remain range bound with some
amount of volatility remaining ingrained in it. The levels of 8050 should be
watched out for and until then all downsides should be utilized to make selective
purchases.
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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