Daily Market Trend Guide Tuesday, 31 March 2015
‘Where
and when this downtrend end ? Well, there are technical rays of hope ….., it
can be concluded that technical analysis of Nifty reveals that even though the
very immediate technical picture continues to exhibit bearishness, the deeper
technical analysis indicates that the end or at least halt of the current
downtrend is not far.. …..It is strongly advised not to create fresh shorts……As
per the technical analysis given above, we expect this downtrend to at least
halt in near future. – Daily Market Trend
Guide – Monday March 30 2015
Likewise, the markets exhibited strength the previous
trading session on Monday 30 march. The
markets, as expected opened on a firm note. The truncated week started on a
strong footing. Positive global
cues kept the strength in the market
intact through out the trading session. Nifty ended with gains of 150 points
and Sensex of 517 points.
MARKET TREND FOR TUESDAY, MARCH 31 2015
It is always feels good to see an end to a
correction in the markets, but is this a
real end to the correction or an empty rally ? Will this sustain ? Lets see the
technical picture.
Strength in the markets was expected as Technical
Analysis of Nifty indicated that. For today also, the Daily High Low chart of
Nifty indicates high top higher bottom formation, which is bullish. The Pattern
Analysis reveals that in spite of strong rally yesterday, the intraday high of
the markets encountered resistance of the lower trend line of the trading range
the markets were in the previous week. The Trend Line has occurred since
December 2014 and have resulted in a small trading range of 130 points Nifty,
the lower level being 8513 and the upper level being 8643. Since the markets
were trading below this range, the lower level of this range offered
resistance, and like wise the market gave
the intraday high of 8504 against the resistance level of 8513.
For today, the
markets are poised for a positive start. Technical strength comes for the close of yesterday, which is
very near to its intraday high. Global cues strengthens the possibility of a firm start of the market
today.
Important indicator RSI, which was showing Failure
Swings, has got repaired and shows no signs of bearishness , MACD continues to
be bearish, but it remains for a few ways in this mode even if the market
rallies, as it takes time to correct itself.
However, Pattern Analysis of Daily High Low Chart
of Nifty depicts some resistance levels. First is the lower Trend Line the
level is 8513. However, this will become support for today, if the markets open
above this and remains above this level in the initial hours of trade, possibility of which is high. Further up, the
markets are likely to face resistance
at 8533 the 100 Day Simple Moving
Average of Nifty. Next technical
resistance is the upper Trend Line level of 8643.
In backdrop
of the above Technical Analysis of Nifty, the derivatives front also needs to
be checked, as yesterdays rally was of more strength then expected. Open Interest in Nifty, which closed with
gains of 150 points or 1.60 % shows
decline of 5.47 % , which indicates that the rise was more because of short
covering. Also out of top five gainers
yesterday, four have shredded open interest, which implies short covering. Thus
the analysis of Derivatives data indicates that the yesterdays rally was more
because of short covering than genuine
buying .
The Technical Analysis given above read along with
the analysis of Derivatives data advises utmost caution at the higher levels .
It is strongly advised against getting carried away with the rise as it is
expected to counter technical resistance
as given above and also the fact that
the rally is more due to short covering than pure buying.
Approach the market with high degree of alertness
on the last day of the Financial Year and the first day of the New Financial
Year this short trading week. Markets
are likely to be in the trading range of 8513 on lower side and 8643 in near future.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
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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