MARKET TREND FOR WEDNESDAY, AUGUST 24, 2016
Markets continued to severely consolidate and ended on a
flat note with a minor gain after recovering nearly 50-odd points from the low
point of the day. Today, we again expect the Markets to open on a modestly
negative note and look for directions. It is once again expected to continue to
consolidate and therefore it once again keeps the analysis for today on similar
lines that of yesterday. Today we enter the penultimate day of expiry of
current series and we will see the session remaining dominated with rollover centric
activities.
For today, the levels of 8675 and 8725 will act as immediate
resistance levels for today. The supports come in at 8610 and 8575 levels.
The RSI—Relative Strength Index on the Daily Chart is
55.1161 and it continues to remain neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD remains bearish as it trades
below its signal line. On the Candles, a long lower shadow has occurred.
Though it has occurred in an uptrend, it has more significance if it had
occurred during a downtrend. However, we may see some losses getting arrested
for a while but this is only subject to confirmation today.
On the derivative front, the NIFTY August futures shed 58.12
lakh shares or 32% in Open Interest whereas the September futures added over
74.26 lakh shares or 68.02% in Open Interest. There has been a net addition of
over 16 lakh shares in Open Interest. The NIFTY PCR stands at 0.99 as against
0.97 yesterday.
Coming to pattern analysis, the Markets have turned sideways
after forming a intermediate top at 8728 levels. This has occurred after the
Markets remained in upward rising channel drawn from February lows. However, as
mentioned, this corrective state has resulted in a sideways range bound
movement for the Market while witnessing intermediate selling bouts and has not
resulted in to any major downsides. Overall, if we read the F&O data along
with the lead indicators, Markets will continue to remain in such ranged
movements but the downsides will continue to remain limited.
Overall, with the expiry underway for today and tomorrow, we
will see the session remain dominated with rollover centric activity. We continue
to reiterate our recent view to avoid any major shorts in the Markets and
continue to utilize dips to make fresh purchase as stock specific performance
will continue. Overall, positive but cautious outlook is advised for today.
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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