Thursday, March 19, 2015

Daily Market Trend Guide -- Friday, March 13, 2015

                                                                                                                      Friday, 13 March 2015
MARKET REPORT            March 12 2015
The Correction that was witnessed in the markets for three trading sessions  halted  yesterday, as markets rebounded from its expected  support zone of its  50 Day Simple and Exponential  moving averages.
Yesterday, markets opened on a more than expected firm note.  The strength in the markets continued for the entire trading session, till close. The market remained ranged bound near its intraday high through out trading session. The market  broke out of the  intraday trading range   and staged sharp breakout in last hour of trading session.
The 30-share S&P BSE Sensex closed 0.95%, or 271.24 points, higher at 28,930.41, while the National Stock Exchange’s 50-share Nifty was up 0.87%, or 76.05 points, to end at 8,776.
Substantial amount of short covering was seen in the markets yesterday .
MARKET TREND FOR  FRIDAY, 13 March 2015

Today, before technicals of the markets, a few external, non technical events that are likely to impact the markets today deserves a mention.

Today market sentiments will be positively boosted by late evening passage of Insurance Laws ( Amendment ) Bill by Rajya Sabha. Clues from overseas markets will also positively impact mood of the markets today. IIP and CPI data were released post close of the yesterday’s trading session. Industrial production growth slowed for a second straight month to 2.6% in January, compared with 3.2% in the previous month, while retail inflation inched up to a four-month peak of 5.37% in February. This has increased expectations of another round of rate cut by RBI, sooner than  later.

In backdrop of these external factors impacting the markets today, let us  pay attention to what prevails at the end of the day – technical analysis of markets.

It was mentioned here in previous edition that Pattern Analysis clearly indicates that market is  taking intraday support in range of 50 Day SMA and EMA.- Moving Averages. Hence, till  these are breached, it  can be considered support zone  intraday and at close for the market.

As expected, the correction which continued for three days, halted near these support levels. Pattern Analysis of Nifty indicates that the market has given a Higher Top Higher Bottom on its Daily High Low Chart. With this, at least for the time being, the 50 Day Simple and Exponential Averages ( at Close levels ) , which are 8658 and 8677 as of today have become good support for the market.

On Candle Chart, A white body occurred as Nifty closed higher than they opened. This is a positive. RSI- Relative Strength Index, which was a technical cause of  concern till yesterday, as mentioned in yesterday’s edition of Daily Market Trend Guide, as it showed both Failure Swings and negative Divergence, has repaired itself with yesterday’s rise in Nifty. Technical analysis of Nifty’s RSI throws no causes of technical concerns, as The RSI is not currently in a topping (above 70) or bottoming (below 30) range and is showing neither Failure Swings or Divergence. Another important Momentum Indicator - Stochastic Oscillator - is 13.3990.  This is an oversold reading.


These technicals  of Nifty read along with the backdrop of above mentioned non technical factors today, it can be concluded that positive bias will be more or less intact today. Important resistance exists at 8792 ( 20 Day EMA) and  8871  ( Pattern )  and intraday, with supports at above mentioned range.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA


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