Friday, April 17, 2015

Daily Market Trend Guide -- Friday, April 17, 2015

MARKET REPORT                                                                                 April 17, 2015
The Markets continued to see corrective activity yesterday as well and ended the second day with losses though it did recover from the low point of the day and the levels of 50-DMA did held out as support at close levels. The Markets saw a flat opening and then remained in falling trajectory for the most part of the day while it kept making fresh gradual lows. In the afternoon trade, the Markets went on to form the day’s low of 8645.65. However, the second half of the session saw the Markets attempting some recovery. The Markets did in fact recovered bulk of its day’s losses but the last half hour of trade saw some pressure being exerted on the Markets again. However, the Markets ended the day at 8706.70 registering significant recovery but with net losses of 43.50 points or 0.50% while continuing to form lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, APRIL 17, 2015
Today’s analysis remains more or less on similar lines. We can expect the Markets to open on a flat and quiet note and look for directions. Though we can expect a range bound trade in the morning, the behaviour of the Markets vis-à-vis the levels of 50-DMA which is 8708 today would be very crucial. It would be important for the Markets to maintain levels above this so as to avoid any further weakness from creeping in.

The levels of 8760 and 8815 will act as immediate resistance on the Charts. The supports come in at 8640 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.3584 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish trading above its signal line.
On the derivative front, NIFTY April Futures have shed 52,600 shares or nominal 0.27% in Open Interest. This remains a negligible figure and it appears that significant amount of shorts still continue to exist in the system.

Coming to pattern analysis, the Markets have corrected for the second day after seven days of gains of over 400-odd points. From technical point of view, this correction is healthy and the Markets have so far continue to remain above its critical supports. The Markets have held on to its 50-DMA as support at Close levels. The Markets have another important pattern support at 8640 levels. Even if the Markets continue to consolidate for some more time, there is no structural breach of any major levels as yet. Overall, even some consolidation goes on or some minor downside is seen, it would be healthy correction while keeping the original trend intact.

Overall, while keeping the analysis on more or less the same lines, we continue to reiterate to avoid shorts in the Markets as short traps at lower levels can occur as significant amount of short positions are seen in the Markets. Like yesterday, while keeping the purchases limited adequate liquidity should be maintaining while adopting cautious optimism in the Markets.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

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