MARKET TREND FOR MONDAY, MAY 09, 2016
The Markets are expected to open on a
modestly positive note and we can expect some stability to return o the
Markets. On Friday, the Markets took support from near the falling trend line
which it had moved past in April. We can fairly expect the Markets to remain in
a trading range with support of 7670 levels and upper resistance of its 200-DMA
which stands at 7833 today. The Markets are likely to oscillate between this
trading range. However, sustainable of possible positive opening would be
critical and the intraday trajectory that the Markets form would be critical to
watch out for.
For today, the levels of 7770 and 7820
would act as immediate resistance levels for the Markets. Supports come in at
7670 and 7620 levels.
The RSI—Relative Strength Index on the
Daily Chart is 49.2620 and it remains neutral as it shows no bullish or bearish
divergence or any failure swing. The Daily MACD stays bearish as it trades
below its signal line. On the Candles, a bullish hammer is seen and this
shows potential of the Markets stabilizing in the immediate short term.
However, this requires confirmation today. On the Weekly Charts, the Weekly RSI
is 50.5874 and this too remains neutral with no bullish or bearish divergence
or any failure swings. The Weekly MACD stays bullish as it trades above its
signal line.
On the derivative front, the NIFTY May
futures have shed another 6.44 lakh shares or 3.53% in Open Interest. NIFTY has
been consistently shedding OI since last couple of days.
Coming to pattern analysis, the Markets
have breached its 200-DMA after oscillating in a 140-odd points range for a
couple of days. On its way down, the Markets have taken support
on a falling trend
line which is drawn from 8600 levels. This was a pattern resistance that the
Markets breached on its upside. On the Weekly Chart as well, the Markets have
taken support on a similar falling
trendline pattern support. On the Daily Chart, the Markets have seen its 50-DMA
cutting 100-DMA from below reporting a positive crossover. This may see some
short term upside momentum in the Markets.
All and all, all given and said, there are
fair chances of the Markets seeing some stability. This being said, the Markets
still continues to remain in a no-trade zone. There will be no sustainable up
move until the Markets breach its 200-DMA again in a comprehensive manner and
stays above that. Though it will continue to oscillate in a given range with a
difficult direction bias. Stock specific activities and purchases are likely to
be seen with the profits being protected vigilantly at higher levels.
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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