MARKET TREND FOR WEDNESDAY, AUGUST 17, 2016
The Markets continued to remain in corrective mode yesterday
and today as well, we continue to keep our analysis on absolutely similar
lines. We can expect the Markets to see a modestly negative opening but at the
same time, the Markets are expected to continue with its corrective activities
as well. As mentioned yesterday, though the corrective actions will not see major
downsides but the levels of 8700-8725 has now become a intermediate top for the
Markets.
For today, the levels
of 8685 and 8720 will act as immediate resistance levels for today while the
levels of 8600 and 8560 will see some support coming in for today.
The RSI—Relative Strength Index on the Daily Chart is 57.4580
and it remains neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD stays bearish as it trades below its signal
line.
On the derivatives front, the NIFTY August futures have shed
over 2.03 lakh shares or 0.83% in Open Interest. The NIFTY PCR stands at 1.0 as
against 1.03.
While having a look at pattern analysis, as mentioned often the
Markets showed clear signs of fatigue over past couple of days while the upward
rising channel that the Markets was trading in had started getting narrow. The
Markets had been trading within this channel that is drawn from the lows that
the Markets made in February. The Markets have shown a downward breach from
this and currently this has established the levels of 8700-8725 as its
immediate top. We will not see any significant runaway up moves coming in and
if at all that happens, the sustainability of such up moves will remain
questionable. Sound up moves will occur only after the Markets moves past 8725
comprehensively. On the downside, the levels of 8500 remain an important level
to watch and a major support as well.
Overall, we continue to reiterate a cautious outlook on the
Markets in the immediate short term. Though the inherent long term trend
remains explicitly bullish the Markets will show intermittent corrective
tendencies though the downsides remain limited. Volatility too will remain
ingrained in the Markets. While avoiding any major shorts, any downsides should
be continued to be utilized to make selective purchases as stock specific
out-performance will continue.
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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