MARKET REPORT March
09, 2016
Markets traded very much on the dotted
lines while it consolidated for the second day while respecting its resistance
zone of 7530-7550 levels. The Markets saw a very quiet and flat opening and
after this, it slowly crawled further into the positive territory to trade with
modest gains. While forming its day’s high of 7527.15 in the morning trade, the
Markets slowly started to retrace its gains. By the first half of the session,
the Markets had come off from its intraday highs to trade flat once again. It
slide further into the negative territory and went on to form the day’s low of
7442.15 coming off nearly 80-odd points from the high point of the day. This
way, it spent most part of the session trading in a falling trajectory.
However, the last hour and half of trade saw some recovery coming in. The
Markets managed to recoup most of its losses and it finally settled the day at
7485.30, posting a flat close with net loss of just 0.05 points while forming a
higher top but similar bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, MARCH 09,
2016
Today’s analysis continues to remain once
again on similar lines that of yesterday. The Markets are expected to open on a
flat to modestly negative note and look for directions. They are likely to
continue to consolidate and the levels of 50-DMA will continue to act as
important support at Close levels. The
intraday trajectory that the Markets form will be important to watch out for
and the Markets will have to remain above 50-DMA levels in order to avoid any
weakness from creeping in.
Today, the levels of 7525 and 7550 will
continue to act as resistance for the Markets. Supports exist at 7440 and 7410
levels.
The RSI—Relative Strength Index on the
Daily Chart is 59.5558 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD continues to remain bullish as
it trades above its signal line.
On the derivative front, the NIFTY March
futures have added over 7.74 lakh shares or 3.49% in Open Interest. This very
clearly suggest buoyant undercurrent in the Markets. The NIFTY PCR continues to
stand unchanged at 0.994.
While having a look at pattern analysis,
the Markets have continued to consolidate for the third day in a row. This
signifies underlying strength in the Markets as of now that after a major
pullback of over 10%, the Markets have shown no signs of profit taking or
selling from higher levels. Instead, it has consolidated in a very narrow
range. Such behavior, if continued, often results into the continuation of
current trend. However, the levels of 7525-7550 will have to be watched as
these are the levels that the Markets breached on the downside and they are now
acting as resistance. The Markets can see significant upsides if it manages to
move past 7550. However, before that happens, it is very much likely that it
continues to consolidate for some more time. In the process, the 50-DMA is expected
to act as support at Close levels.
All and all, we continue to reiterate our
yesterday’s reading of the Markets. Moderate purchases may be continued to be
made but more emphasis should be laid on protecting profits at higher levels.
Shorts should be avoided as the Markets are currently consolidating. Overall,
while keeping tight eye on liquidity and existing profits, if any, cautious but
positive outlook is advised for today.
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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