MARKET TREND FOR MONDAY, SEPTEMBER 12, 2016
Given some contradictory technical signals on the Daily and
Weekly Charts, we had mentioned in our Friday’s edition that some corrective
intermittent selling bouts cannot be ruled out. Keeping in line with this
analysis, the equity markets on Friday saw some corrective selling pressure
while it ended with loss of 0.96%. Today, we will see such corrective activity
continuing and the session is likely to remain in a given range with some corrective bias. We can
expect to see the Markets opening on a mildly negative note and some amount of
consolidation is likely to continue. The intraday trajectory that the Markets
form will be critical to watch out for.
For today, the levels of 8890 and 8940 will act as immediate
resistance levels and the supports will come in at 8830 and 8775 levels.
The RSI—Relative Strength Index on the Daily Chart is
62.5151 and it has once again moved below from a topping formation which is
bearish. Beyond this, it remains neutral without showing any bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it continues
to trade above its signal line. On the Weekly Charts, the Weekly RSI is 70.5763
and it has reached its highest value in last 14-periods which is bullish.
Though it does not show any bullish or bearish divergence, it remains in
“overbought” territory on Weekly basis.
Weekly MACD remains bullish trading above its signal line. On the Weekly
Charts, a Shooting Star on the Candles occurred which has capacity to
form a potential top for the Markets in the immediate short term.
On the derivative front, the NIFTY September futures have
shed over 9.12 lakh shares or 2.66% in Open Interest clearly indicating
offloading of long positions.
Pattern analysis of the Markets clearly point towards some
correction continuing in the Markets. On the Daily Charts, though we saw some corrective
activities on the Friday, the Weekly Chart the lead indicators are overbought
and the Candles show potential formation of a top for the immediate short term.
All these indicate that the levels of 8968 have now become an immediate top for
the Markets and any fresh up move shall occur only after this level is breached
on the upside.
All and all, though we may see some mildly negative opening
and some technical pullback as well later in the day, the overall state of the
Markets will remain that of consolidation with the levels of 8775 and 8730
acting as very crucial supports. IT pack will continue to see some accumulation
on the lower side and some sectoral outperformance will continue as well.
Overall, cautious outlook is advised for the day.
Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg.
No. INH000003341)
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA),
INDIA
http://milan-vaishnav.blogspot.com
+91-98250-16331
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