MARKET TREND FOR WEDNESDAY, JUNE 29,
2016
The Markets ended the day with modest gains
but it continued to track the upper rising trend line as resistance at the day’s
high. Today, we enter the penultimate day of the expiry of the current series
and therefore we can fairly expect the session to remain dominated with
rollover centric activities. Today, the Markets are expected to open with
modest gains but in the same breath, it is also expected to track its pattern
resistance and also remain bit volatile as well.
For today, the levels of 8150 and 8175 will
act as immediate resistance levels for the day. The supports come in at 8080
and 8025 levels.
The RSI—Relative Strength Index on the
Daily Chart is 51.3099 and this 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, rollovers
continued as the NIFTY June futures shed over 13.63 lakh shares or 11.25% in
Open Interest. The July series added over 24.17 lakh shares or 41.17% in Open
Interest. The NIFTY PCR stood at 1.07 as against 1.05.
Coming once again to pattern analysis, as
mentioned in our yesterday’s edition, the Markets have breach on the lower side
of the rising channel drawn from February lows. Now with it being out of the
Channel on the lower side, each subsequent up moves will be resisted by the
upward rising trend line. The Markets may continue to see moderate up movers as
this pattern resistance line too keeps rising every day. However, it is very much
evident from the overall structure of the Charts that the levels of 8250-8300
has now become an immediate top for the Markets are is not likely to be breach
easily in the near term. Also, F&O data strongly suggests that this level
has formidable creation at these strike prices which is also likely to pose a
statistical resistance to the Markets.
Overall, we continue to keep our
recommendation on similar lines. We reiterate to avoid shorts and keep
purchases limited to specific sectors which have dependence on local economy
and also use all up moves to vigilantly protect profits. Some sharp profit
taking bouts from higher levels cannot be ruled out. Overall, while keep
exposures limited preservation of cash is advised.
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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