Wednesday, March 16, 2016

Daily Market Trend Guide -- Wednesday, March 16, 2016

MARKET REPORT                                                                                     March 16, 2016
The Markets yesterday remained in thoroughly corrective mode as it ended the day with losses after continuing to resist at 7550 levels. The Markets saw a quiet opening and while forming the day’s high at 7545.20 in the very early minutes of the trade, spent the morning trade in a capped range with limited losses. The rest of the session saw the Markets forming a falling channel and it remained in this trajectory for the entire session. The Markets saw itself gradually and steadily losing ground while it remained in downward trajectory. By end of the session, it went on to form day’s low of 7452.80. It showed no signs of recovery and it finally settled the day at 7460.60, posting a net loss of 78.15 points or 1.04% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 16, 2016
The Markets have kept the resistance levels of 7550 sacrosanct and have continued to resist at those levels. Today, we can expect a modestly positive opening in the Markets and the intraday trajectory would continue to remain important. There has been no structural breach on the Daily Charts and even if the Markets correct a bit more, it would be perfectly within acceptable range. Only a breach below 7370 will be a reason to worry.

For today, the levels of 7510 and 7550 will continue to act as immediate resistance for the Markets.  The supports come in at 7425 and 7370 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.8926 and it remains neutral as it shows no bullish or 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 1.60 lakh shares or 0.74% in Open Interest. This remains a nominal figure and the NIFTY PCR stands at 0.95 as against 0.96.

Coming to pattern analysis, after consolidating for nearly 8 sessions in sideways trajectory, the Markets continued to resist to 7550 and after resisting to this level for multiple times, it showed some amount of moderate correction yesterday. Just to refresh, this level of 7550 is a triple bottom level of a descending triangle that the Markets breached on the downside and therefore it is now acting as a resistance on its way up. The Markets have supports at 7425 and further down at its 50-DMA at 7370 and even if the Markets corrects up to this level, there will be no structural breach on the Charts. Any breach below 7370 will be a reason to worry for the Markets in the immediate short term.

All and all, the eyes are on the FOMC meet as well which is scheduled later today. There is no expectation of a rate hike and the Fed Commentary would be important to watch as well. Today, overall, the Markets are expected to trade in a range with some amount of caution ingrained in it. The movements are expected to be range bound and it is advised to keep the purchases very selective and moderate while adopting a moderately cautious outlook on the Markets.

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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