MARKET TREND FOR WEDNESDAY, SEPTEMBER 14, 2016
After suffering a gap down opening on Monday, the equity
markets showed no signs of recovery and finally ended the day with a loss of
151.10 points. With the Monday’s session, the Markets have received a 100%
throwback / retracement from the of 8700-8730 levels from where it had achieved
a breakout on the upside. After losing 237 points in two sessions, we can
expect the Markets to attempt and stabilize today. Though intraday trajectory
would be critically important to watch out for, the behavior vis-à-vis the
levels of 8700-8730 zone would be crucial to watch out for.
For today, the levels of 8700 and 8675 will be the important
levels which are expected to act as supports. The resistance can be seen at
8745 and 8755 levels.
The RSI—Relative Strength Index on the Daily Chart is
50.4574 and it remains neutral as it shows no bullish or bearish divergence or
any failure swings. Though the Daily MACD still remains bullish while trading
above its signal line, it has reported a Bearish Divergence. A Falling
Window, i.e. a gap created on the Candles may see the Markets struggling
somewhat more at current levels. However, this needs confirmation on the
following day.
On the derivative front, the NIFTY September futures have
shed over 6.28 lakh shares or 1.88% in Open Interest clearly indicating
offloading / unwinding of long positions.
Pattern analysis on the Daily Charts makes it evident that
the Markets have seen 100% retracement / throwback back to 8700-8730 zone after
breaking out on the upside couple of days back. This usually implies that we
may see some stability returning to the equity markets but in the same breath,
the levels of 8730-8700 would be critical to watch out for. Any breach below
this level will see some more weakness creeping in.
All and all, though we cannot expect a outright pullback, we
can certainly hope for some stability to return and for this, it would be
important to see the NIFTY not breaching the 8700-mark. Some of the sector
indices like CNXIT has shown potential bottom formation while forming a
engulfing bullish candle and therefore we may continue to see outperformance in
such stocks. Pharma and other select stocks may also see some outperformance.
Overall, cautious outlook ahead for the Markets today.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member: Market
Technicians Association, (MTA), USA
Member: 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.