Daily Market Trend Guide -- Friday, February 19, 2016

MARKET REPORT                                                                             February 19, 2016

Markets continued with its pullback but at the same time it continued to resist around 7200-7220 levels while it ended yet another day with gains. Markets saw a decently positive opening and in the morning trade, it maintained its gains in a steadfast manner. In the late morning trade, it strengthened further to form the day’s high of 7215.10. It resisted nearly three times around these levels, quite on expected lines. It pared nearly half of its gains by late afternoon trade. It formed its intraday low of 7127.85, though it continued to trade in positive territory. The last hour trade saw Markets rising again and it finally settled the day at 7191.75, posting a decent gain of 83.30 points or 1.17% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TODAY FRIDAY, FEBRUARY 19, 2016

Today is the likely day for consolidation for the Markets. While keeping the analysis on the same lines that of yesterday, the Markets will continue to see themselves resisting at 7200-7240 zone. Today, the Markets are likely to open on a quiet note and look for directions. The intraday trajectory that the Markets forms post opening would be crucial to watch out for and the behavior vis-à-vis the levels of 7200-7240 will be important to watch out for.

For today, the levels of 7210 and 7250 will act as immediate resistance levels for the Markets. The supports come in 7130 and 7085 levels.

The RSI—Relative Strength Index on the Daily Charts is 43.1142 and it remains neutral as it shows no bullish or bearish divergence or any failure swings.  The Daily MACD stays bearish as it trades below its signal line. However, it is attempting to move towards possible positive crossover in coming days if the Markets consolidate.

On the derivative front, the NIFTY February futures have added further over 5.24 lakh shares or 2.43% in Open Interest. This signifies addition of fresh longs into the system.

Going by the pattern analysis, the Markets have expectedly resisted to the 7200-7240 zone. These are the levels that the Markets breached on the downside and therefore the same are acting as resistance on its way up. It is important to note that the Markets are unlikely to breach its previous lows even if it corrects a bit. Though the Markets may correct from higher levels and tend to consolidate in a broad range, the previous lows are not likely to be tested unless the Union Budget remains problematic. The reason being – in the previous week and a half when the Markets are oscillating in a broad range, there has been evident increase in volumes and this is a sign of possible accumulation. However, this remains purely indicative at this juncture.

Overall, the Markets may remain little volatile and may oscillate in a given broad range. The Markets may still remain vulnerable to selling pressure around 7200-7240 zone and therefore we continue to reiterate our view of keeping the overall exposure moderate and remaining vigilant at higher levels. The cautious view is reiterated given the fact that the Markets are yet to move past the 7200-7240 zones.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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