MARKET TREND FOR WEDNESDAY, JUNE 08,
2016
Markets attempted to break free of the
consolidation that it was witnessing over couple of days but at the same time,
it has got overbought again and some signs of complacency are clearly visible
on the Charts. Today, the Markets are expected to see a flat opening, but
yesterday’s high point is likely to act as immediate resistance and top for the
Markets until it is comprehensively breached on the upside.
For today, 8294 and 8325 will act as
immediate resistance levels for the Markets. Supports come in much lower at
8220 and 8140 levels.
The RSI—Relative Strength Index on the
Daily Chart is 71.6851 and it has reached its highest level in last 14-days
which is bullish. However, it now trades in “overbought” territory and shows no
bullish or bearish divergence or any failure swings. The Daily MACD stays
bullish as it trades above its signal line.
On the derivative front, the NIFTY June
futures have 6.64 lakh shares or 3.16% in Open Interest. The NIFTY PCR stands
at 1.08 as against 1.06.
Coming to pattern analysis, the Markets
have fortified itself over last couple of days of sideways consolidation after
a robust 450-odd point’s rise that it saw while it broke out of a triangle
formation. After doing this, the Markets showed no signs of any correction and
instead consolidated for couple of days in a narrow range. It attempted to
break out of it yesterday on the upside and it continues to track its rising
pattern resistance. Today, such pattern resistance lies at 8300-8325 levels.
Overall, the Markets will continue to
display strength while it tracks its pattern resistance but while doing so, it
should be very clearly noted that at any given point of time, the Markets will
continue to remain vulnerable to selling bouts from higher levels. The very
reason that the Markets trades in “overbought” territory calls for some amount
of caution. Overall, while remaining cautious with each higher levels, positive
outlook is advised for today.
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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