Wednesday, August 31, 2016

Daily Market Trend Guide -- Wednesday, August 31, 2016

MARKET TREND FOR WEDNESDAY, AUGUST 31, 2016
Keeping in line precisely as analyzed, the Markets staged a decent up move yesterday and attempted to move past its immediate high of 8728 levels while trying to break out of the consolidation zone. Today, we can expect the Markets to open flat and deliberate a bit around 8728 levels but the undercurrent continue to remain strong. Even if the Markets consolidate a bit around these levels, it is likely to show very limited corrective activity and is likely to demonstrate strength as it has done yesterday.

For today, the levels of 8775 and 8800 will act as immediate resistance levels for the Markets. The supports come in at 8690 and 8665 levels.

The RSI—Relative Strength Index on the Daily Chart is 62.5865 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence or any failure swing. The Daily MACD still continues to remain bearish as it trades below its signal line. On Candles, the big white candle that has appeared near the breakout area tends to lend credibility to the breakout. At the same time, a rising window that has occurred usually implies continuation of bullish trend.

On the derivative front, the NIFTY September futures have added over added nearly 9.68% in Open Interest. This implies creation of short positions in the Markets. Also, the NIFTY PCR has risen to 1.06 as against 1.05 yesterday.

Coming to pattern analysis, the Markets remained in upward rising channel since February lows until the beginning of August. However, this Channel was broken as the Markets formed its immediate top at 8728 levels. However, this consolidation turned into limited downsides as the Markets saw just intermittent selling bouts but remained sideways for most part of this month while oscillating around keeping the level of 8520-8550 as sacrosanct support. Yesterday, the Markets have attempted to move past this level and it would be important to see if the Markets continue with its up move it initiated yesterday.

Overall, though buoyant trend is expected to continue, in event of any consolidation once again, the levels of 8690-8740 will be critical to watch out for. The Markets are at the most likely to oscillate in a given capped range before it moves up again. It is best advised to continue to make selective purchases in event of any consolidation and grossly avoid shorts. Overall, positive 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

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.