Sunday, April 5, 2015

Daily Market Trend Guide -- Monday, March 30, 2015

Daily Market Trend Guide                                                        Monday, 30 March 2015
SPECIAL EDITION

MARKET TREND FOR MONDAY 30 MARCH 2015
A very unusual occurrence  has taken placed on Daily and Moving Averages Charts of Nifty. On day of expiry of March series, a day before the last trading session, the markets opened with  a downward gap.  Though  market opening with a downward gap is not  unusual occurrence for the markets,  this time it assumed technical significance.
The downward  gap opening of the markets  made the markets to open   below its  much relied upon and very important supports of Patterns and more importantly 100 Day Moving Average of Nifty. This  rendered these important supports completely useless as these supports never come into to play as supports due to  opening of the markets below these levels. And to add insult to the injury, because of opening below these supports, the market faced stiffed resistance at those levels during intraday up move on that day , technically, supports act as resistance if approached from below !.

Study  of Nifty charts reveals that  such  disregard of 100 Day Moving Average as important support rendering it useless  and throwing it out of play has never occurred  at least since January 2008 ! ( See the Blue Line since beginning in the above Chart )
For today also, the technical charts do not draw an encouraging picture.   Moving averages of Nifty depicts that markets are  ruling far below its 100 Day Moving average , which is 8531 as of today. This implies weakness in short term. Pattern analysis also says that the important support of Lower Line of Rectangle has been broken .    Candlesticks Charts also  indicate that  the steady downward pattern is bearish.  MACD continues  to remain below its signal line since last fourteen trading sessions, which is bearish . As of today, important Indicator RSI exhibits  a Failure  Swing as it has just reached its lowest value in the last 14 period(s).  This is bearish.
Where and when this downtrend  end ?  Well, there are technical rays of hope. 
 Important three  being the Trend Line on Daily High Low Chart , the 200 Day Moving Average of Nifty and the RSI. Longer the trend lines, stronger the support it offers. In case of Nifty, this Trend  Line on Daily High Low Chart has started  since Sepetmber 5, 2014. During this downtrend , this Trend Line is expected to offer significant support to  markets.  Technical Reading  of this trend Line in terms of levels of Nifty  is 8180.  The current downtrend is expected to at lease halt  around this  level.
Second important support , which Nifty is fast approaching is its 200 Day Simple Moving average.  Larger the range in terms of days of a moving average, stronger the resistance or support as the case may be.  The 200 DMA of Nifty, in a   downtrend is expected to offer strong support. The 200 DMA of Nifty as on today is 8169.
In  addition to the above  two technical positives ,the  important indicator,  RSI strengths the possibility of the downtrend ending  or at least halting in near future . In spite the RSI currently  being bearish, it is fast approaching its ‘bottoming out ’  zone.
Thus, it can be concluded that  technical analysis  of Nifty reveals that even though the very  immediate  technical picture continues to exhibit bearishness, the deeper technical analysis  indicates that the end or at least halt of the current  downtrend is not far.
Markets are slated to open on  flat to slightly positive note today . Going by the Open Interest Analysis, even though the technicals for today are weak as above, the markets are likely to remain in positive trajectory at least in the initial hours of trade. But be vigilant as close approaches.
 However, this week being only of three working days,   markets may be jittery at every rise, which may  encounter selling pressure . Volatility  due  to short covering may also be seen during this week.
It  is strongly advised not to create fresh shorts , and be moderate in trading during  shortened  trading week .   As per the technical analysis given above, we expect this downtrend to at least halt in near future.


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

www.MyMoneyPlant.co.in
+91-98250-16331

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