MARKET TREND FOR MONDAY, AUGUST 22, 2016
The Markets continued to remain in consolidation mode and
ended the day flat after a range bound move on Friday. Today as well, we are
all likely to see the Markets remaining in consolidation mode once again. The
Markets are likely to see a flat to mildly negative opening and likely to trade
in a congestion zone created and the levels of 8700-8725 will continue to act
as immediate resistance levels for the Markets. We also enter the expiry week
of the current series and the Markets are likely to remain dominated with
rollovers as well.
For today, the levels of 8680 and 8720 will act as immediate
resistance levels for the Markets. The supports come in at 8620 and 8575
levels.
The RSI—Relative Strength Index on the Daily Chart is
58.5666 and it remains neutral as it shows no bullish or bearish divergence or failure
swings. The Daily MACD is still bearish as it trades below its signal line. On
the Weekly Charts, the Weekly RSI is 68.4710 and this too remains neutral as it
shows no bullish or bearish divergence or any failure swings. The Weekly MACD
continues to remain bullish as it trades above its signal line. On Candles, a Doji
has occurred which continues to show a potential stoppage of up move that the
Markets are witnessing over previous couple of weeks.
On the derivatives front, the NIFTY August futures have shed
over 6.34 lakh shares in Open Interest. The September futures have added over
700,000 shares, indicating a net addition in Open Interest. The NIFTY PCR
stands at 1.05 as against 1.06.
Coming to pattern analysis, the Markets have been trading in
a narrow congestion zone after falling out of the rising channel drawn from the
February lows. The Markets have been consolidating after forming a intermediate
top at 8728 levels and the movement has turned sideways. However, in any case,
though the Markets continue to remain inherently buoyant, the levels of 8728
have been a immediate top for the Markets. With the congestion zone, the
Markets will not witness any significant up move until it moves past the
8700-8725 levels significantly.
Overall, nothing changes much for the analysis like the
previous week as the Markets continue to remain in congestion zone. With the
Markets remaining inherently buoyant, we do not recommend any major positional
shorts in the Markets. However, though there is evident need to protecting
profits at higher levels all dips should be utilized to make selective
purchases.
Milan Vaishnav, CMT
Technical Analyst
Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
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