Daily Market Trend Guide -- Friday, June 24, 2016

MARKET TREND FOR FRIDAY, JUNE 24, 2016

The Markets showed a sharp recovery yesterday and ended with gains in anticipation of England remaining within the EU. However, given the current highly likelihood of Brexit happening, the Markets are set to see a sharply lower opening today. The global markets trade lower and this will have very sharp and deep knee jerk reactions in local markets as well. It would be important to note that this is a major global event and though technicals would come into play, but it would be later when the dust settles and some exact impact of the event is precisely known.

All supports will come into play today. With likely lower opening by 200-odd points expected, the Markets are likely to test the upward rising trend line drawn from February lows and might test 8070-8020 levels today.

The RSI—Relative Strength Index on the Daily Charts is 63.0870 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as trades below its signal line. On the Candles,  an engulfing bullish pattern  is seen and since it has happened near the high levels, it indicates a potential top.

On the derivative front, the NIFTY June futures have added over 3.20 lakh shares or 2.10% in Open Interest. The NIFTY PCR stands at 1.18 today.

Coming to pattern analysis, we had mentioned in our yesterday’s edition that the level of 8260 is a lower high that the Markets have formed at 8295. These levels have been anyway acting as immediate resistance for the Markets and even yesterday’s up move has not seen the Markets making any breakout on the upside. Having said this, with the gap down opening eminent, the Markets may test 8070-8020 levels and if the weakness persists, the possibility of the Markets testing the 50-DMA cannot be ruled out.

However, more importantly, we need to focus on something more important. Even if the Markets test 50-DMA, there will still be no structural damage on the Charts as the Markets currently trades above all of its moving averages. It is best advised to stay away from the Markets with restricting exposures. It is further advised to wait for appropriate levels before some quality purchases are made. Though some short term impact cannot be ruled out, eventually quality purchases will pick up in coming days.

Milan Vaishnav, CMT

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA

Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Thursday, June 23, 2016

MARKET TREND FOR THURSDAY, JUNE 23, 2016

The Markets have continued to remain in a ranged session yesterday as well while it ended marginally in the red. Today’s analysis once again continue to remain on similar lines as the markets are likely to continue to remain in a capped range given the pendency of Brexit vote which is later today. Today, we can expect the Markets to open on a flat to mildly positive note and look for directions and the levels of 8260 will continue to act as immediate resistance levels for the Markets. The Markets are not likely to take a definite directional move and will react to the Brexit outcome tomorrow.

For today, the levels of 8260 and 8295 will act as immediate resistance levels for today. On the downsides, supports exist at 8180 and 8140 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.8794 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 13.33 lakh shares or 7.89% in Open Interest. This clearly shows some reduction in positions yesterday in the system.

Coming to pattern analysis, after forming a immediate top of 8295 levels, the Markets have now been consolidating in a broad range since last 12 sessions and have made another lower top, tentatively at 8260 levels. Having said this, today as well, we will continue to see the Markets consolidating in the first half of the session. The second session might remain volatile as participants will try to adjust their trades preparing for the Brexit outcome tomorrow. Having said this, in event of any downsides, the likely supports for the Markets can be the rising trend line drawn from the February lows and after that the 50-DMA. In case of any eventuality, the Markets may not see any damage beyond this.

Overall, so far as today is concerned, it is best advised to refrain from taking any major trades today. As always, exposures to be kept at minimum levels and more emphasis should be laid on preservation of cash. Shorts to be thoroughly avoided and any dips should be continued to be utilized to make very selective purchases. Overall, cautious outlook is advised for today.

Milan Vaishnav, CMT

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA

Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Wednesday, June 22, 2016

MARKET TREND FOR WEDNESDAY, JUNE 22, 2016

Yesterday, the Markets remained extremely ranged and while it ended the day with minor losses, today is likely to remain no different. Today, we can once again expect the Markets to open on a flat to mildly negative note and look for directions. The Markets are not likely to take any directional view in definite manner given the pendency of the Brexit vote and this will, therefore, keep our analysis for today much on similar lines that of yesterday.  While the levels of 8295 will continue to act as immediate top for the Markets, it will keep oscillating in a ranged manner on the downside.

For today, the levels of 8245 and 8295 will act as immediate resistance levels for the Markets. The supports come in lower at 8180 and 8120 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.4318 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 5.84% in Open Interest. The NIFTY PCR stands at 1.14 as against 1.15.

While having a look at pattern analysis, we observe that the intermediate top of 8295 that the Markets have made has remained sacrosanct as of now. The Markets have registered a slight decline yesterday and if it does not move past yesterday’s high of 8257, it will then report a “lower high” than 8295 and this will indicate slight weakness in the immediate short term. If we move past 8257, then the Markets are likely to test its immediate high of 8295 levels. It is important to note that given the pendency of the Brexit vote, the Markets are likely to see high amount of volatility. However, it also becomes important to note that the Markets currently shows no structural damage as of now as it continues to trade above all of its moving averages.

Overall, we continue to reiterate our modest stance on the Markets. Given the fact that the Brexit is pending, and given the fact that this can induce large amount of volatility, the overall exposures should be kept very limited and modest with using each up move to book and protect profits. On the same note, shorts should be avoided as no structural signs of weakness are seen. Overall, moderate exposures with high preservation of cash is advised for the immediate short term.

Milan Vaishnav, CMT

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA

Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Tuesday, June 21, 2016

MARKET TREND FOR TUESDAY, JUNE 21, 2016

The Markets relatively outperformed yesterday as compared to its global peers but overall traded precisely on expected lines as it opened low but recovered during the session to end with gains. Today, we can fairly expect the Markets to open on a quiet note and look for directions. The Markets have remained in a range and have not reported any break out on the upside and therefore we can once again expect it to consolidate in a given range with the levels of 8295 continuing to act as immediate top.

For today, the levels of 8250 and 8295 will act as immediate resistance levels for the Markets. The supports come in much lower at 8170 and 8115 levels.

The RSI—Relative Strength Index on the Daily Chart is 62.1796 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD stays bearish as it trades below its signal line. On the Candles, an engulfing bullish line has occurred. 

However, if this occurs during an uptrend, which happens to be the case with NIFTY, it marks a potential top. However, this needs confirmation. In any case, the levels of 8295 continue to remain an immediate top for the Markets.

On the derivative front, the NIFTY June futures have added over 4.16 lakh shares or  2.44% in Open Interest. This signifies creation of fresh long positions in the Markets.

While having a look at pattern analysis, the Markets continue to remain in a broad trading range with the levels of 8050-8070 acting as supports and the level of 8295 marking an immediate top. The Markets currently continues to trade above all of its major moving averages but is yet to give any breakout on the upside. A fresh significant and sustainable up move shall occur only after the Markets move past 8295 levels. In between that, it will have volatility induced by Brexit to deal with. In any case, it is likely to remain in a broad trading range given the prescribed parameters.

Overall, we continue to reiterate our view to avoid shorts as there is no structural indications to do so. However, profits at every high level until a breakout is achieved should be vigilantly protected as the recent up moves have come without FII participation and relatively weak market breadth. With the bright chances of Markets remaining in a broad range with some amount of volatility ingrained in it, moderate exposures with preservation of cash is advised.

Milan Vaishnav,

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA

Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, June 20, 2016

MARKET TREND FOR MONDAY, JUNE 20, 2016

The Markets have remained in state of consolidation all through previous week and today as well the Markets will continue to remain heavily under consolidation. The news of Governor Raghuram Rajan deciding not to continue with his second term after September will have sentimentally negative effect for the Markets. Following this, we can expect a lower opening in the Markets and see some specific sector reacting to this. However, this dip too is likely to get bought into and we will see the Markets not breaking the near term pattern it has formed. This is likely to be aided by the global markets with trades stable and positive.

For today, the levels of 8205 and 8245 will act as immediate resistance levels for the Markets. The supports come in at 8130 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.0418 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 59.5700 and this too remains neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY June futures have added 2,550 shares or 0.01% in Open Interest. This practically keeps open interest unchanged.

Coming to pattern analysis, as mentioned often in our previous editions, the Markets have formed its temporary top at 8294 levels and this level has now become an immediate top for the Markets. Fresh up moves will occur only after the Markets moves past this level. Until this happens, we will continue to see the Markets oscillating in a broad range. However, also as mentioned often, the inherent up trend of the Markets remain intact as of now as it continue to trades above all of its moving averages.

Markets had an important event – Brexit – to react to this week. With developments on RBI front, it have  one more sentimentally negative news to digest and this will see a knee jerk reaction which is likely to get bought into once we get ahead in the session. We reiterate our view to avoid shorts and use any dips to make selective fresh purchases while vigilantly guarding profits at higher levels.

Milan Vaishnav,

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA

Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com