MARKET REPORT March
14, 2016
Markets continued to display good amount of
strength as it consolidated for yet another day while continuing to resist at
key levels. The Markets saw a flat opening and after dipping into the red for a
very brief period, saw itself gathering strength. It pulled itself back into
positive territory and went on to form the day’s high of 7543.95. It once met
with stiff resistance near the 7530-7550 zones and pared ground rapidly. It saw
a sharp paring of gains. The Markets not only gave up all of its gains but dipped
into negative and formed the day’s low at 7460.60. It came off nearly 80-odd
points from the high point of the day. However, the second half of the session
saw the Markets attempting to recover once again. It recouped all of its losses
to trade into the positive territory. It spent the rest of the session trading
in a capped range and finally ended the day at 7510.20, posting a net gain of
24.05 points or 0.32% while forming a similar top but slightly higher bottom on
the Daily Bar Charts.
MARKET TREND FOR MONDAY, MARCH 14,
2016
The Markets are likely to attempt a
breakout on the upside after nearly 6-odd days of consolidation and resistance
to the 7550-levels. However, at the same time, the Markets face a critical
opening as well. Today, the Markets are likely to see a decently positive
opening and the opening is likely around the 7550-levels or slightly above
that. If this possible opening levels are achieved, it would be critically
important for the Markets to sustain those levels and build up on that. If not,
then the Markets will continue to consolidate as it has been doing over
previous day.
For today, the levels of 7550 and 77615 are
likely to act as immediate resistance levels. The supports come in at 7460 and
7385 levels.
The RSI—Relative Strength Index on the
Daily Chart is 59.6260 and it is neutral as it shows no bullish or bearish
divergence. The Daily MACD remains bullish as it continues to trade above its
signal line. On the Weekly Charts, the Weekly RSI is 46.4168 and this too
remains neutral without showing any bullish or bearish divergence. The Weekly
MACD, however, is still bearish as it trades below its signal line but it is
moving towards a positive crossover.
On the derivative front, the NIFTY March
futures have added over 2.21 lakh shares or 1.02% in Open Interest. The NIFTY
PCR stands above 1. With the addition in OI, some amount of fresh are seen
being added once again.
Coming to pattern analysis, the Markets
have been resisting to the 7530-7550 resistance zone towards last six trading
session. As mentioned often in our previous editions, this is the major support
levels that the Markets breached on the downside. Now, on its way up, these
levels have been acting as resistance. However, we have also mentioned often in
our previous editions that the Markets are displaying great amount of strength
as even after a pullback of over 10% post lows posted on Union Budget day, the
Markets are just consolidating and showing no signs of any weakness. Having
said this, today, it is likely to see opening levels on or above 7550 levels
and it would be critically important to see if the Markets are able to build
and capitalize on this expected positive opening. If the Markets are able to
move past the 7550 levels, its logical advance can test the 100-DMA levels
which are 7650 in coming days.
Overall, a decently positive opening is
expected and it would be critically important to see if the Markets moves past
the 7550 resistance zone or continues to consolidate. In any case, the
undercurrent continues to remain buoyant. Shorts should be avoided and
selective purchases should be continued to be made. Overall, positive 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
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