Thursday, May 21, 2015

Daily Market Trend Guide -- Thursday, May 21, 2015

MARKET REPORT                                                                                   May 21, 2015
Markets ended yet another day with gains today but did so with modest gains as it spent the day in a narrow and capped range. The Markets saw positive opening on expected lines and after a decently positive opening, it gained some further strength to form the day’s high of 8440.35. The Markets tested these levels twice in the morning trade but did not witness a significant breakout from here. The second half of the session saw some minor paring of gains as the Markets came off from its day’s high. Again no sharp movement on either side was seen and the Markets ended up spending the rest of the session in a narrow and capped range in sideways trajectory. It finally ended the day at 8423.25, posting a modest gain of 57.60 points or 0.69% while continuing to form a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, MAY 21, 2015
Today’s session is likely to remain on similar lines and we can once again expect a quiet to modestly positive opening for the Markets. The Markets are likely to approach its 50-DMA levels and therefore it would be again prone to some consolidation from higher levels. With overall bias on the upside some amount of volatility too is expected to remain in the Markets.

For today, the levels of 8487 and 8535 will act as immediate resistance for the Markets. The supports would come in at 8310 levels which is the 200-DMA of the Markets.

The RSI—Relative Strength Index on the Daily Chart is 53.3037 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, NIFTY May futures have shed 19,600 shares or 0.14% in Open Interest. This is a very negligible figure and one can draw inference that OI has remained practically unchanged and therefore no major short covering has happened.

Taking a cue from pattern analysis, as mentioned in our previous editions of Daily Market Trend Guide, the Markets have attempted a reversal after forming its potential bottom on March 7th and have in the process managed to move past its 200-DMA. In today’s session and in the sessions to come, it would be important for the Markets to remain above this 200-DMA level. Some amount of consolidation can be expected at higher levels but any breach below the 200-DMA will bring in some short term weakness in the markets.

Overall, the going has been good for the Markets in the past sessions but the amount of delivery based buying and the conviction that the Markets would otherwise require is missing and this causes a little cause of concern and opens up some chances of consolidation once again at higher levels. Keeping this in mind, very moderate stock specific purchases may be made but cautiously vigilant approach is advised at higher levels.

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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