Tuesday, September 20, 2016

Daily Market Trend Guide -- Tuesday, September 20, 2016

MARKET TREND FOR TUESDAY, SEPTEMBER 20, 2016
Monday’s session remained extremely range bound as the NIFTY moved in a narrow 20-odd points for the day while the Markets ended the day with modest gains. Today, our analysis remains on similar lines that of yesterday as the Markets are likely to continue to positively consolidate. The global markets too have attempted to stabilize around their key supports and this likely to positively aid the consolidation of domestic markets. BoJ, which is likely to make some critical changes with regard to Quantitative Easing and the Federal Reserve, which will cast its interest rate decision will solicit some reaction from the Markets as well.

For today, the levels of 8840 and 8895 will act as immediate resistance levels and the supports are likely to come in at 8760 and 8730 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.8151 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish while it trades above its signal line.

On the derivative front, the NIFTY September futures have added over 2.88 lakh shares or 0.90% in Open Interest.

Pattern analysis clearly suggests that the Markets are currently undergoing range bound consolidation and the undercurrent remains buoyant. After making a top at 8968 levels, the Markets achieved 100% throwback to 8700-8730 levels and it took support there. These levels continue to act as immediate major support and so long as it trades above this critical support zone, it is laying groundwork for a further up move. However, in coming days, it should be no surprise if we see capped trading range and some positive consolidation.

All and all, the session should be approached with positive bias. Though some amount of volatility cannot be ruled out, all dips should be continued to be utilized to make selective purchases while avoiding shorts. Sectoral out-performance will continue and stock specific action will dominate coming sessions. Overall, positive outlook is advised for the day.

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


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