MARKET TREND FOR MONDAY, JUNE 13,
2016
Markets swung nearly 80-odd points either
side on Friday or ended the day with modest losses. Today, we can expect the
Markets to open once again on a lower note. News factors like weak IIP numbers,
terror attack in the US, etc., can weigh on the Markets but speaking purely on
technical grounds, the Markets are currently under healthy mode of correction
and this corrective mode is likely to persist today as well.
For today, the levels of 8205 and 8270 are
immediate resistance levels for the Markets. The supports come in at 8130 and
8080 levels.
The RSI—Relative Strength Index on the
Daily Chart is 61.1927 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it trades
above its signal line. On the Candles, an upper rising shadow has
occurred and this remains a potentially short term bearish candle, though it
requires confirmation. On the Weekly Charts, the Weekly RSI is 59.5668 and this
too remains neutral as it shows no bullish or bearish divergence or any failure
swing. The Weekly MACD stays bullish as it trades above its signal line.
On the derivative front, the NIFTY June
futures have shed 21,000 shares or nominal 0.10% in Open Interest. This has
kept OI virtually unchanged and we can fairly say that that has been no major
selling / unwinding of positions that
was visible on Friday.
Coming to pattern analysis, the Markets
have started to show some signs of weariness after its sharp up move of over 400-odd
points after breaking out of a triangle formation. So far as current behavior of the Markets is
concerned, it has been consolidating after forming a immediate top at 8294
levels. The current consolidation that the Market is witnessing has been in
fact healthy for the Markets after the kind of rise that it has witnessed. Today,
with the type of gap down opening that is expected, the Markets may test its
immediate support levels and see some stability returning from lower levels.
Overall, there are very high chances that the
dips get bought into and therefore the Markets see some buying emerging from
lower levels. It is advised to use such dips to accumulate quality stocks and
therefore selective purchases may be made at lower levels. Overall, though the Markets may remain
volatile as it expects lots of news flow this month buy any structural breach
on the Charts is not likely. Cautious outlook 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
