Tuesday, March 15, 2016

Daily Market Trend Guide -- Tuesday, March 15, 2016

MARKET REPORT                                                                                March 15, 2016
The Markets failed to report a clear breakout as it opened above its critical levels of 7550 but ended the day below that. The Markets saw a decently positive opening on expected lines and went on to form the day’s high of 7583.70 in the morning trade. However, as apprehended, the Markets chose to continue to consolidate as it started to slowly pare its opening gains. It transformed itself into a falling channel and continued to slowly pare its opening gains. While the Markets skid below 7550 levels by afternoon, no major selloff was seen. All the Markets did was to consolidate and at no point of time it dipped into negative territory while it reported day’s low of 7515.05. Some sideways trade was witnessed in the final hour and the Markets finally settled the day at 7538.75, posting a net gain of 28.55 points or 0.38% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 15, 2016
Today’s analysis continues to remain perfectly on similar lines that of yesterday. The Markets would again see itself opening around its critical resistance zone of 7550 and therefore, the behavior of the Markets vis-à-vis this level would be important to watch out for. Though all eyes remain on FOMC meet wherein no rate hike is expected, the lower than expected CPI Inflation number will have positive impact on the sentiment which clears further room for a rate cut in April Credit Policy review.

For today, the levels of 7550 and 7590 will act as immediate resistance levels for the Markets. The supports come in at 7510 and 7460 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.8378 and it does not show any failure swings. The NIFTY has set a fresh 14-day high but RSI has not and this has caused Bearish Divergence. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY March futures have shed over 2.49 lakh shares or 1.13% in Open Interest. The NIFTY PCR stands at 0.95.

Pattern analysis also remains on similar lines. The Markets have shown good amount of strength as it has consolidated for nearly six-odd session after pulling back as much as 10% from the lows it formed on Union Budget day. Having said that, usually such consolidation breaks out in the direction of its previous move. Therefore, in this case, it is most likely that the Markets break out on the upside and it has more chances to continue its pullback / up move. Also, as mentioned often in our previous edition, the logical targets for the Markets can be its 100-DMA on the upside. In the event of the Markets not breaching the levels of 7550 on the upside, it is likely to continue to consolidate in a capped range but it is less likely to see any major selling pressure from higher levels.

All and all, we continue to reiterate our advice on making selective and moderate purchases. At the same time, though while strictly avoiding shorts, profits should be vigilantly protected at higher levels until a clear breakout above 7550 is achieved. Overall, continuance of positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331



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