Friday, April 1, 2016

Daily Market Trend Guide -- Friday, April 01, 2016

MARKET REPORT                                                                                      April 01, 2016
The technical factors prevailed over the Markets as the Markets failed to move past its pattern resistance and ended the day flat with nominal gains after coming off from its intraday highs. The Markets saw a flat opening and after opening modestly on a negative note it soon crawled into the positive territory. It went on to strengthen itself in the morning trade while it formed its intraday high of 7777.60. However, it got itself in sideways trajectory in the early afternoon trade. The Markets were unable to hold on to its gains and by midsession had pared all of its gains to trade flat. It did saw a spurt in the later part of the afternoon but that was not sustained either as it was followed by a near vertical paring of gains where the Markets formed its intraday low of 7702. With some recovery, it finally settled the day at 7738.40, posting a flat close with minor gains of 3.20 points or 0.04% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, APRIL 01, 2016
Caution is likely to prevail in the Markets as the Markets are expected to open on a modestly negative note. The Markets, as of now, has failed to clear its important pattern resistance of a falling trend line and with the expected lower opening, the zone of 7730-7760 will continue to pose resistance to the Markets. On the downside, the levels of 100-DMA is expected to act as support. The intraday trajectory that the Markets form after opening would be important to watch out for.

For today, the levels of 7750 and 7785 will act as important resistance levels for the Markets. The supports come in much lower at 7650 and 7610 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.4578 and it does not show any failure swing. However, RSI has set a fresh 14-period low whereas NIFTY has not yet and this is Bearish Divergence.  Daily MACD is bullish as it still continues to trade above its signal line.  On the Candles, a Spinning Top has occurred. Such formations often tend to have potential to halt the up moves temporarily.

On derivative front, NIFTY witnessed over 68.20% of rollovers and the Market Wide rollovers were seen over 72%. The April series saw addition of over 46.78 lakh shares or 32.97%  in Open Interest. The NIFTY PCR stands at 1.10 as against 1.08.

Coming to pattern analysis, the Markets have resisted to one of its important pattern resistances; a falling trend line drawn from 8600 levels. The Markets have been oscillating back and forth while resisting to this falling trend line and taking support on its 100-DMA on the lower side. Today, with modestly lower opening expected, the Markets are likely to continue to resist to this pattern resistance and subsequently, the 100-DMA, which is 7583 is expected to act as support at Close levels.

Overall, the resistance zone of 7730-7760 continues to hold good as of today and the Markets will not witness any runaway up moves until it significantly moves past this level. As of now, the 100-DMA holds as important support failing which 7550 may be tested. We continue to reiterate our cautious outlook on the Markets while continuing to keep fresh purchases and very moderate levels. Cautious outlook for the day is advised.


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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