Daily Market Trend Guide -- Friday, June 19, 2015

MARKET REPORT                                                                             June 19, 2015

Precisely on the analysed lines, the Markets continued to post decent gains for the fifth day in a row as it continued with its up move and ended the day with decent gains. The Markets saw positive opening and it continued to remain in positive territory through out the session. Post opening in the positive zone, the Markets formed an upward rising channel and continued with this formation until the end. It went on to form the day’s high of  8186.90 by late afternoon trade. Markets came off mildly from those levels but more or less maintained its gains. It finally settled the day at 8174.60, posting a net gain of 83.05 points or 1.03% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JUNE 19, 2015

Today as well, we can fairly expect the Markets to open on a modestly positive note and trade positive at least in the initial trade. The Markets are back in to the broad trading range and they are likely to continue with its up move and approach its falling trend line and / or its 50-DMA in immediate near term. The Markets have held on its major bottom of 8000-mark which will continue to act as major bench mark support in the immediate short term.

For today, the levels of 8245 and 8310 are immediate levels for resistance whereas the supports exist at 8100 and 8050.

The RSI—Relative Strength Index on the Daily Chart is 49.0992 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD has reported a positive crossover and is now bullish while trading above its signal line.

On the derivative front, the NIFTY June futures have added over 2.29 lakh shares or 1.46% in Open Interest. This is a important indication to show that the yesterday’s up move has not resulted any short covering but is now being moderately replaced with fresh buying.

Coming back to pattern analysis, though the Markets have maintained and held on to its support of 7950-8000 levels, it has just attempted to form the bottom. However, as of today, the Markets still continues to remain in the intermediate corrective trend and still trades within the falling channel. In due course of time, it is expected to continue with its up move and encounter resistance near its 50-DMA levels which also coincides with the falling trend line. Key would be to see if that results into consolidation and if the Markets resume its up move and goes for confirmation of bottom.

All and all, as mentioned, until the confirmation occurs, the Markets will continue to remain in the broad trading range and downward sloping corrective channel. The immediate resistance for the Markets would be near its 50-DMA. Markets, therefore, still has some room for upside before it consolidates. Sectoral out performance will continue and therefore selective buying can be done. Positive caution is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

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