Tuesday, May 3, 2016

Daily Market Trend Guide -- Tuesday, May 03, 2016

MARKET TREND FOR Tuesday, May 3, 2016
After taking support on the 200-DMA which stands at 7846 today, the Markets slipped a bit below that on yesterday’s close. Today, we can once again expect the Markets to open on a quiet note and look for directions. The analysis remains more or less on similar lines today as well as the levels of 200-DMA will continue to pose resistance intraday as well as at Close levels. The intraday trajectory that the Markets form would be important to watch out for and any continuing weakness will see the Markets testing 7775 and 7750 levels.


For today, the levels of 7820 and 7845 will act as immediate resistance levels. The supports come in at 7775 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.1632 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD is bearish post reporting negative crossover and it now trades below its signal line.

On the derivative front, the NIFTY May futures have shed over 8.49 lakh shares or 4.11% in Open Interest. The NIFTY PCR stands at 0.90 as against 0.94.

Coming to pattern analysis, the Markets have retraced after forming an intermediate top at 7879 levels and have since then made multiple attempts to move past it. While doing so it also tested its 200-DMA for multiple times and while oscillating in a 140-odd points range for couple of days finally slipped below the 200-DMA. Though it continues to stay within a filter, the level of 200-DMA will continue to pose resistance intraday as well as at Close levels. In the immediate short term, the Markets may see some weakness continuing and if the weakness persists, then it may test some lower levels like 7750 and downwards. Having said this, if we take a intermediate view, the Markets have so far formed a strong bottom around 6580 levels and there would be no fear of reversal of trend so long as Markets trade above 7550 levels.

Overall, if we take a immediate short term view, there are chances that we may see the Markets remaining range bound and little weak while continuing to resist to 200-DMA. Purchases should be kept selective and limited to defensives and up moves should be continued to be utilized to protect profits. Continuance of positive outlook is advised for today as well.

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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