MARKET TREND FOR TUESDAY, JUNE 28,
2016
The Markets continued to trade in a capped
range, much on expected lines yesterday and ended the day with minor gains.
Today as well, we continue to keep our analysis on similar lines. The Markets
are expected to open on a modestly negative to flat note and look for
directions. It is expected to remain volatile but in a capped range and since
it has broken out of the channel; it is likely to continue to resisting to the
rising trend line drawn from the lows of February.
For today, the levels of 8130 and 8175 will
continue to act as resistance levels for the Markets. The supports come in at
8040 and 7960 levels.
The RSI—Relative Strength Index on the
Daily Chart is 48.9465 and it 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 derivative front, rollovers
continued as the NIFTY June futures shed over 13.17 lakh shares or 9.81% in
Open Interest. The July futures added over 22.87 lakh shares in OI. There was
net OI addition and the NIFTY PCR stood at 1.04.
Coming to pattern analysis, as we mentioned
in our yesterday’s edition, the Markets have breached the channel on the
downside and therefore, the trend line drawn from the lows of February which
was acting as pattern support is now likely to act as resistance. However,
given the rising nature of the trend line, this potential resistance levels
keeps rising every day. Further to this, it still remains important to note
that the Markets continue to trade above all of its averages and therefore it
remains structurally intact. There is no structural damage as yet and the lows
of Friday, i.e. 7927 continue to remain sacrosanct as of now. Any breach below
this level, which is not likely, will bring further weakness in the Markets.
Overall, though the Markets have not shown
any structural breach, it is very much likely that it continues to see ranged
volatility. This is more important when we have expiry lined up this week. We
continue to reiterate our view of preserving more cash. With every dip, if any,
limited purchases may be made. However, this may be kept very selective and
sector specific. Overall, cautious optimism is advised for the day.
Milan
Vaishnav, CMT
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member:
Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
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