MARKET TREND FOR WEDNESDAY, JUNE 22,
2016
Yesterday, the Markets remained extremely
ranged and while it ended the day with minor losses, today is likely to remain
no different. Today, we can once again expect the Markets to open on a flat to
mildly negative note and look for directions. The Markets are not likely to
take any directional view in definite manner given the pendency of the Brexit
vote and this will, therefore, keep our analysis for today much on similar
lines that of yesterday. While the levels
of 8295 will continue to act as immediate top for the Markets, it will keep
oscillating in a ranged manner on the downside.
For today, the levels of 8245 and 8295 will
act as immediate resistance levels for the Markets. The supports come in lower
at 8180 and 8120 levels.
The RSI—Relative Strength Index on the
Daily Chart is 60.4318 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD still remains bearish as it
trades below its signal line.
On the derivative front, the NIFTY June
futures have shed over 5.84% in Open Interest. The NIFTY PCR stands at 1.14 as
against 1.15.
While having a look at pattern analysis, we
observe that the intermediate top of 8295 that the Markets have made has
remained sacrosanct as of now. The Markets have registered a slight decline
yesterday and if it does not move past yesterday’s high of 8257, it will then
report a “lower high” than 8295 and this will indicate slight weakness in the
immediate short term. If we move past 8257, then the Markets are likely to test
its immediate high of 8295 levels. It is important to note that given the
pendency of the Brexit vote, the Markets are likely to see high amount of
volatility. However, it also becomes important to note that the Markets
currently shows no structural damage as of now as it continues to trade above
all of its moving averages.
Overall, we continue to reiterate our
modest stance on the Markets. Given the fact that the Brexit is pending, and
given the fact that this can induce large amount of volatility, the overall
exposures should be kept very limited and modest with using each up move to book
and protect profits. On the same note, shorts should be avoided as no
structural signs of weakness are seen. Overall, moderate exposures with high
preservation of cash is advised for the immediate short term.
Milan Vaishnav,
CMT
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical
Market Analysts, (ATMA), INDIA
+91-98250-16331
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