Wednesday, March 23, 2016

Daily Market Trend Guide -- Wednesday, March 23, 2016

MARKET REPORT                                                                                   March 23. 2016
The late session recovery saw the Markets ending with modest gains but it did continue to see stiff resistance at its key pattern resistance levels. The Markets saw a very quiet and modestly negative opening though it spent the morning trade trading flat in a very narrow and capped range. The afternoon trade saw the Markets weakening as it formed a downward falling channel. It kept making gradual lows and formed its intraday low of 7643.80 in late afternoon trade. The last hour and half, however, saw a sharp spurt coming in. Not only did the Markets managed to recoup all of its losses but went on to trade in the positive. It went on to form the intraday high of 7728.20, and resisted at its key pattern resistance lines. It finally settled the day at 7714.90, posting a modest gain of 10.65 points or 0.14% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 23, 2016
Today’s analysis remain on similar lines that of yesterday. The Markets are likely to open on a flat note and look for directions. With the total pullback being nearly 900-odd points old, and the Markets very clearly approaching its multiple pattern resistances, it is very much likely that the Markets consolidate at higher levels. Either the Markets will consolidate displaying strength just as it did yesterday; or there can be some amount of profit taking at higher levels.

For today, the levels of 7730 and 7775 will act as immediate resistance levels for today. The supports come in much lower at 7643 and 7600 levels.

The RSI—Relative Strength Index on the Daily Chart is 66.9470 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY March futures have shed further over 4.13 lakh shares or 1.92% in Open Interest. There has been clear reduction in March positions over two previous days.

Coming to pattern analysis, the Markets have pulled back over 900-odd points from the lows that it made in the Budget session. In the process, it consolidated for several days near 7550 levels. This is the level which was a triple bottom of a descending triangle that the Markets broke on the downside and this very level acted as stiff pattern resistance when the Markets were pulling back. Having said this, the Markets have moved past that as well and also its 100-DMA but now it meets multiple pattern resistance at present levels. There are high chances that the Markets may either consolidate at present levels or it may see some minor profit taking from higher levels.

Overall, it is also important to note that today is the last working day of the week as Thursday and Friday are holidays on account of Holi and Good Friday respectively. This may also cause some caution of weigh in to the Markets ahead of the holidays. Having said this, even speaking from the technical perspective, we continue to reiterate our advice to keep purchases very limited and lay more emphasis on protection of profits 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

Tuesday, March 22, 2016

Daily Market Trend Guide -- Tuesday, March 22, 2016

MARKET REPORT                                                                                          March 22, 2016
Markets continued to inch upwards precisely on expected lines and ended yet another day with decent gains. The Markets saw itself opening above its 100-DMA levels and stayed above it for the entire session. After seeing a modestly positive opening, the Markets failed to give a runaway rise but maintained itself above the 100-DMA levels. The first half of the session was spent with very limited gains in sideway trajectory. The Markets headed nowhere but it continued to maintain its critical levels. It was in the second half of the session that the Markets saw further strength coming in. It strengthened itself and went on to post gradual highs. The Markets went on to form the day’s high of 7713.55 by end of the session. These levels were maintained and it finally settled the day at 7704.25, posting a net gain of 99.90 points or 1.31% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 22, 2016
NIFTY have risen over 880-odd points from the lows it made in the Budget session. Today, the Markets are likely to see a quiet opening and there are all chances that the Markets may see some profit taking or it may consolidate from these levels. Few points from here, the Markets meet couple of pattern resistance on the Daily Charts. Therefore, the intraday trajectory that the Markets form would be critical to watch out for. The chances of some retracement cannot be ruled out.

For today, the levels of 7725 and 7740 will act as immediate resistance levels for the Markets. Supports come in lower at 7610 level.

The RSI—Relative Strength Index on the Daily Chart is 66.5447 and it has reached its highest level in last 14-days which is bullish. It does not show any bullish or bearish divergence on the Charts. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, the NIFTY March futures have shed over 7.51 lakh shares or 3.38% in Open Interest. The NIFTY PCR stands at 1.05 as against 0.99 yesterday.

Coming to pattern analysis, the Markets resisted to the level of 7550 for several days. This was the level that the Markets breached on the downside and it was the triple bottom support for the Markets while it formed a Descending Triangle. On its way up, this level posed great level of resistance and forced the Markets to consolidate for several days. However, as the Markets breached this level on the upside, it gained nearly 150-odd points from there. It has now approached a pattern resistance once again. There are great chances that the Markets may consolidate at this level or may induce some profit taking post some gains today.

Overall, the Markets are all likely to see some consolidation or some amount of profit taking from higher levels today. With the Markets approaching multiple pattern resistance, this possibility cannot be ruled out. It is now advised to refrain from major purchase and greater emphasis should be laid by short term trades to book and protect profits at higher levels. Cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331



Monday, March 21, 2016

Daily Market Trend Guide -- Monday, March 21, 2016

MARKET REPORT                                                                                      March 21, 2016
The Markets on Friday traded perfectly within technically defined parameters. It ended the day with a decent gain after it moved past its critical resistance levels of 7550 but halted just at its 100-DMA. The Markets saw a opening which was little less strong that what was expected. It did attempt to move past 7550 levels but kept coming off facing a stiff resistance. The Markets spent the first half of the session in a sideways trajectory with modest gains and failed to move past the critical resistance zone. It was in the last hour and half of trade that the Markets saw a sharp up move. It managed to move past the critical resistance of 7550 and went on to form the day’s high of 7613.60. It finally ended the day at 7604.35, posting a net gain of 91.80 points or 1.22% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, MARCH 21, 2016
The Markets once again faces a critical test today. On Friday, it has attempted to breakout on the upside while moving past its important resistance levels of 7550. Today, we can expect a modestly positive start to the Markets. Speaking purely on technical terms, since the Markets have ended near the high point of the day on Friday, today, it is expected to continue with its up move. However, today’s expected opening levels would be around its 100-DMA which is 7614 and it would be important to watch the behavior of the Markets vis-à-vis this level.

For today, the levels of 7614 and 7645 will act as immediate resistance levels for the Markets. The supports come in at 7550 and 7510 levels.

The RSI – Relative Strength Index on the Daily Chart is 62.5776 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it continues to trade above its signal line. On the Weekly Charts, the Weekly RSI is 48.4872 and it has reached its highest value in last 14-weeks which is bullish. Also, the Weekly RSI has formed a fresh 14-week high and the NIFTY has not yet and this is Bullish Divergence.  The Weekly MACD has reported a positive crossover and it now trades above its signal line and is bullish. However, on the Candle, a Hanging Man pattern has occurred. This pattern has a potential to halt the up move temporarily if it occurs after a up move or near any resistance level.

On the derivative front, the NIFTY March futures have added over 7.71 lakh shares or 3.59% in Open Interest. The NIFTY PCR stands at 0.99 as against 0.96 on Friday.

Coming to pattern analysis, the Markets have attempted a breakout on the upside as it has moved past the levels of 7550. However, it has halted exactly at its 100-DMA which is 7614 yesterday. This level can act as a resistance at Close levels for the Markets. If the Markets move past this level, it can test levels of 7650-7695 wherein it meets yet another pattern resistance. If the Markets choose to consolidate, the levels of 7550 are expected to lend support on the downside. There are chances that the Markets may see some short term consolidation. However, the undercurrent continues to remain buoyant.

It is important to note that the Markets choosing to consolidate on Weekly basis is very much likely as we have a short 3-day week this time with Thursday and Friday being holidays due to Holi and Good Friday. Given this fact, even if the undercurrent remains buoyant, it becomes important to continue to protect profits at higher levels and keep purchases moderate. Overall, positive outlook is continued for today.

Milan Vaishnav,
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331