MARKET TREND FOR THURSDAY, JUNE 09,
2016
The Markets continued to trade in narrow
range and track the rising pattern resistance while it ended the day with
nominal gains. The Markets are likely to open today with modest gains once
again but this will continue to keep our analysis on similar lines. The Markets
may open modestly positive but they remain overbought and continue to remain
vulnerable to corrective bouts at higher levels.
Today, the levels of 8310 and 8335 will act
as immediate resistance levels for today. The supports come in lower at 8185
and 8150 levels.
The RSI—Relative Strength Index on the
Daily Chart is 71.9747 and it has reached its highest levels in last 14-days
which is bullish. However, it trades in overbought territory and shows no
bullish or bearish divergence. The Daily MACD stays bullish as it trades above
its signal line.
Coming to pattern analysis, the Markets
have risen over 550-odd points over last three months and after breaking out on
the upside once again, it has been tracking the upper rising trend line
resistance. This line is drawn from lows of 7250 levels and since it is rising,
the pattern resistance keeps rising every day and today, even if the Markets
tests 8300 levels and above, it will still trade below this pattern resistance.
This keeps the Markets vulnerable to corrective bouts at higher levels.
Overall, the overbought nature of the
Markets coupled read along with overall technical structure keep the Markets
due for a short term correction at any higher levels from now on. It is advised
to avoid aggressive buying at higher levels and utilize all up move in
protecting existing. Cautious approach at higher levels is advised for today.
Milan
Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
