MARKET TREND FOR FRIDAY, SEPTEMBER 16, 2016
While trading perfectly on analyzed lines, the domestic
equity markets traded in a narrow range and consolidated for the second day in
a row while keep its head successfully above the critical 8700-mark as it ended
the day yesterday with minor gains. Today as well, while once again keeping the
analysis on similar lines, we would like to add some positive bias to that as
well. Today, we can fairly expect the Markets to remain stable and trade
positive and some chance to resume its up move. However, the levels of 8700
would continue to remain an extremely critical level to watch out for.
Today, the levels of 8765 and 8795 will act as immediate
resistance levels while the supports will come in at 8700 and 8665 levels.
The RSI—Relative Strength Index on the Daily Chart is
52.3049 and it remains neutral while showing no bullish or bearish divergence
or any failure swing. The Daily MACD stays negative while trading below its
signal line. On the Candles, two potentially bullish / reversal causing
formations have been observed. Yesterday’s candle is a Doji” (wherein the real body gaps above or
below the previous candle) and this candle also has a long lower shadow.
Now, if this happens near a support or if it appears after a decline, it can
mark a potentially bullish reversal. However, both of these require
confirmation on the following day.
On the derivative front, the NIFTY September futures has
shed over 5.77 lakh shares or 1.77% in Open Interest. Since shows some more
amount of short covering from lower levels in the Markets.
Having a close look at the Pattern Analysis, it is much
visible that the after seeing 100% retracement after breakout out from the
8700-8730 levels on the upside, these levels have successfully acted as support
for the Markets on its way down. The reading remains clear that so long as the
Markets remain and trade above 8700-levels, no major downsides will be
witnessed. However, any breach below 8700-mark will see some pain in the
immediate short term.
All and all, the reading on the technical charts, the
F&O data and the lead indicators clearly suggest a positive bias for the
Markets. There are increased chances that today we may see some attempt to move
on the higher side. Though bulk of the global outlook will remain range bound
due to pending US Interest Rates outcome on September 21, it is widely expected
that the rates would remain unchanged and Emerging Markets in general and India
in particular will stand to favorable react to this. Overall, while refraining
from shorts, selective buying can be done with any range bound movement.
Cautiously positive outlook advised for today.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member:
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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