MARKET TREND FOR WEDNESDAY, AUGUST 10, 2016
Though the Markets saw a modest decline yesterday, it came
off nearly 40-odd points from the low point of the day before Close. The
Markets continued its consolidation keeping the levels of 8700-8720 intact as
resistance. Today, we are once again likely to see a modestly positive to flat
opening in the Markets. We are likely to see the Markets trading mildly
positive in the initial trade but the levels mentioned will continue to act as
immediate resistance to the Markets.
The levels of 8720 and 8745 will act as immediate resistance
levels for the Markets today. The supports will come in lower at 8640 and 8585
levels.
The RSI—Relative Strength Index on the Daily Chart is
63.2335 and it remains neutral as it shows no bullish or bearish divergence or
any failure swing. The Daily MACD stays bearish as it trades below its signal
line.
On the derivative front, the NIFTY August futures have shed
29,250 shares or 0.12% in Open Interest. With the OI remaining nearly
unchanged, the NIFTY PCR has come down a bit at 0.98 as against 1.0 yesterday.
While having a look at pattern analysis, the Markets have
continued to remain within the upward rising channel drawn from February lows.
However, this time, it has tested the lower range of that channel. Having said
this, it becomes important to note that this channel is getting narrower with
each passing day and therefore the distance or the size of the peaks and
troughs have been narrowing. Given this fact in view, it will not be a surprise
if the Markets either gives a sharp directional bias in coming days or gets
flat in a sideways consolidation which will last longer than usual.
Overall, keeping in line with our previous analysis carried
out we reiterate the use of all up moves to protect existing profits. Fresh
purchases may be continued but it is advised to remain vigilant at higher
levels and profits should be protected. Sectoral and stock specific performance
is likely to continue. Overall, positive caution is advised for the day.
Milan Vaishnav, CMT
Technical Analyst
Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA
+91-98250-16331
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