Thursday, March 19, 2015

Daily Market Trend Guide -- Wednesday, March 18, 2015

MARKET REPORT                                                                                       March 18, 2015
Volatility continued to persist in the Markets as the Markets saw swings on either side before ending the day with decent gains on back of sharp short covering in the last hour of the trade. The Markets saw a modestly positive opening and it saw some more strength in the late morning trade as the Markets formed its intraday high of 8742.55. It flattened its trajectory for a brief period and the afternoon trade saw a steady paring of morning gains. At one point of time the Markets pared all of its gains to trade absolutely while forming the day’s low of 8630.80 coming off nearly 100-odd points from high point of the day. However, the last hour of the trade saw equally sharp short covering from lower levels. The Markets saw a near parabolic rise and it recouped most of its afternoon losses. It finally ended the day at 8723.30, posting a net gain of  90.15 points or 1.04% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 18, 2015
Expect the Markets to open on a modestly positive note and look for directions. The support zone of 8620-8660 has held out as good support levels for the Markets and this would continue to be important support zone for the Markets in intermediate short term as well. It would be important to see the intraday trajectory that the Markets forms post opening which would dominate the trend for the day.

The levels of 8790 and 8845 would act as resistance for the Markets. The supports come in at 8630 and 8600 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.4533 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bearish trading below its signal line.

On the derivative front, the NIFTY March futures have shed over 8.54 lakh shares or 3.42% in Open Interest. Though this very distinctly shows short covering from lower levels, and it can also be interpreted as validating the support zone as well. NIFTY PCR stands at 0.91.

Coming to pattern analysis, the Markets have managed to hang on above the support zone of 8620-8660 and its filter. This support zone would continue to remain an important support zone as any breach below this level and its filter will see the Markets facing some more weakness in the immediate short term. So long as the Markets continue to remain above this zone, it would continue to see consolidation and would keep its overall trend intact.

All and all, though the Markets have managed to remain above its important support levels, it is not completely out of the woods as yet. It needs to move past the levels of 8920 and remain above that to resume its up move. Until that happens it would continue to remain in a very broad trading range and consolidation zone. While continuing to keep overall exposure at modest levels, selective approach 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

www.MyMoneyPlant.co.in
+91-98250-16331

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