MARKET REPORT February
11, 2016
Markets wore a
thoroughly bearish undertone yesterday as it opened lower, tested its fresh
52-week lows and ended the day with losses yet again. The Markets saw a
modestly gap down opening and in the initial trade, managed to keep its head
above its critical levels of 7240.However, after defending this level for some
time, the Markets slipped a bit further in the early afternoon trade. Though
the Markets stayed in sideways trajectory for the most part of the first half,
it slipped further to form the day’s low of 7177.25. The second half saw some short covering led
recovery from lower levels. However, the Markets still ruled below its critical
levels of 7240 and settled the day at 7215.70, posting a net loss of 2.50
points or 1.13% while forming a lower top and lower bottom on the Daily Bar
Charts.
MARKET TREND FOR
THURSDAY, FEBRUARY 11, 2016
Today, the Markets are
once again likely to open on a lower note and look for directions. The Markets
have breached its important support levels of 7240 yesterday and have made
fresh lows. These levels of 7240-7250 will now act as resistance for the
immediate short term. Today, there are chances that the Markets may make fresh
52-week lows once again but at the same time, it will remain prone to short
covering from lower levels, especially in the second half of the session.
For today, the levels
of 7240 and 7275 will act as immediate resistance levels for the Markets. The
supports will come in at 7170 and 7110 levels.
The RSI—Relative Strength
Index on the Daily charts is 35.1089 and it shows no failure swings. However,
the NIFTY has made a fresh 14-day low while RSI has not yet and this is Bullish
Divergence. The Daily MACD has reported a bearish crossover and it now trades
below its signal line. On the Candles, a falling window has occurred again.
Such candles often signal continuation of bearish tone for the short term
irrespective of intermittent pullbacks.
On the derivative
front, the NIFTY February future have added over 1.04 lakh shares or 0.56% in
Open Interest. The NIFTY PCR has remain unchanged at 0.82.
Coming to pattern
analysis, the Markets yesterday breached the important short term pattern
support of 7240. This was its previous 52-week low and therefore it is likely
to see some more weakness creeping in. This has also kept the original major
levels of 7540 sacrosanct as it breached them and resisted twice while pulling
back. So, taking a view of the overall structure of the charts, the Markets may
even see pullbacks at lower levels but it will remain in intermediate bear
trend for the immediate short term. No sustainable trend reversal will occur
until the Markets moves past and sustains well and comfortably above 7540
levels. For the immediate short term the levels of 7240-7250 will act as a
resistance in the immediate short term.
Overall, the Markets
are set to open lower, but we may see some likely pullback as we go ahead in
the session. However, with the Markets breaching some important levels, it is
likely to continue to wear a bearish undertone. There are chances that we see intermittent
pullbacks and shorts at lower levels should be avoided. Dips should be utilized
to make very modest purchases. More liquidity should be maintained by keeping
exposures at very limited levels while adopting a cautious outlook on the
Markets.
Milan
Vaishnav,
Consulting Technical Analyst
Af. Member: Market
Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
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