MARKET TREND FOR THURSDAY, SEPTEMBER 29, 2016
The Markets ended the day with modest gains yesterday after
struggling in the initial trade and ended the day with modest gains. The levels
of 50-DMA has continued to act as support at Close levels and today, this keeps
our analysis on the similar lines. The Markets do not seem completely out of
the woods as of now and the levels of 50-DMA and 8680 will remain critical
levels to watch out for. Any drift below this will bring short term weakness in
the Markets. Today is the expiry day of the current derivative series and we
will see the session remaining heavily dominated with rollovers.
The levels of 8770 and 8820 will act as immediate resistance
levels for the Markets. The supports will come in at 8700 and 8620 levels.
The RSI—Relative Strength Index on the Daily Chart is
50.1787 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. The Daily MACD stays bearish while trading below its signal
line.
On the derivative front, the NIFTY September futures shed
over 33.24 lakh shares or 16.14% in Open Interest while October futures added
over 40.34 lakh shares or 29.33% in Open Interest.
If we evaluate the overall short term pattern on the Charts,
the Markets have formed a lower top at 8900 levels after marking 8968 as its
immediate top. The Markets have taken supports around 8680-8700 range twice and
this has formed a small Descending Triangle on the Daily Chart. This is
potentially bearish in the short term. To fail this pattern, we will need to
see the Markets moving above 8870-8900 levels in order to resist from getting
weaker. The support zone of 8680 also coincides with 50-DMA which is 8687 and
therefore these levels become critically important levels to watch out for. Any
breach below these levels will bring in short term weakness on the Daily
Charts.
All and all, even if we see short term up move, the Markets
will not be completely out of the woods until it moves past 8870-8900
levels. Until this happens we will see
the trading sessions oscillating in a capped range with a negative bias. Today,
we might see some consolidation on the Bank stocks while it deals with
expectations of a rate cut in coming days. Apart from this, stock specific and
sectoral out-performance will continue.
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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.