MARKET TREND FOR
MONDAY, APRIL 18, 2016
The Markets are
expected today to open on a modestly negative note. It shall adjust itself to
the global set up as it opens after two days of holidays followed by a weekend.
Having said this, the Markets have a punctuated week again as tomorrow is once
again a holiday on account of Mahavir Jayanti. The Markets will see itself
trading in a ranged manner with a corrective bias as it has approached its
200-DMA after moving past the 7730-7760 zones.
For today, the level
of 200-DMA, i.e. 7872 will act as immediate resistance level. The supports come
in much lower at 7775 and 7750.
The RSI—Relative Strength
Index on the Daily Chart is 65.2600 and it does not show any failure swing.
However, the NIFTY has set a fresh 14-period high while the RSI has not and
therefore it shows Bearish Divergence. The Daily MACD has reported a positive
crossover and is now bullish as it trades above its signal line. On the Weekly
Charts, the Weekly RSI is 53.8506 and it has reached its highest value in last
14-weeks, which is bullish. It does not show any bullish or bearish divergence.
The Weekly MACD stays bullish as it trades above its signal line.
On the derivative
front, the NIFTY April futures have added 13.45 lakh shares or 9.05% in Open
Interest. This is a positive indication that fresh positions were seen added as
the
Markets advanced while adding OI.
Coming to pattern
analysis, the Markets resisted to the falling trend line resistance zone of
7730-7750 levels for couple of days before breaking upwards. The next logical
target for the Markets was its 200-DMA which is 7872. The Markets have closed a
notch below that and this level is expected to cause significant resistance to
the Markets in immediate short term. If we take a look at the Weekly Charts,
unlike Daily Charts, the Markets are yet to give any clear breakout from the
very similar falling trend line drawn from 8600-levels. The Markets is yet to
give a clear and clean break out on the Weekly Charts.
All and all, with the
Markets having not yet given any clean break out on the Weekly Chart and with
the 200-DMA in the close vicinity, it is likely to remain in corrective mode or
see a range bound trade. Fresh positions to be taken only after the Markets
moves past the 200-DMA and until that happens all up moves should be utilized
to book and protect profits.
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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