Friday, May 13, 2016

Daily Market Trend Guide -- Friday, May 13, 2016

MARKET TREND FOR FRIDAY, MAY 13, 2016
Today’s Market analysis remains more or less on similar lines that of yesterday. Today, following weak CPI and IIP data will cause the Markets to continue to remain in consolidation phase. Today, we can expect the Markets to open on a lower note and once again test levels around the 200-DMA of the Markets which stand at 7819. The behavior of the Markets in the zones of 7820-7850 will be critical to watch out for. However, if the Markets consolidate and maintain levels above 200-DMA, it would be healthy for the Markets in the long run.


Today, the levels of 7940 and 7975 will act as immediate resistance levels for the Markets. The supports come in at 7820 and 7775 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.27, and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it trades below its signal line. However, it continues to inch towards reporting a positive crossover in coming days.

On the derivative front, the NIFTY May futures have added over 3.23 lakh shares or 1.94% in Open Interest. This remains a healthy sign as the Markets have went on to add fresh long 
positions in the Markets.

Coming to pattern analysis, the Markets have so far maintained itself above 200-DMA levels. So long as they maintain themselves above 200-DMA, it will continue to consolidate in a broad trading range of 200-DMA on the lower side and the upper intermediate resistance levels of 7970-7990. The Markets, in the immediate short term will continue to consolidate in this broad 170-odd points trading range. Any slip below the 200-DMA will induce some short term weakness in the Markets. However, this remains less likely and the Markets will see themselves oscillating in this broad trading range.

All and all, the approach of the Markets is likely to remain bottom up as fundamentally screened and technically strong stocks and sectors are likely to see selective purchases and out performance. Overall, we continue to reiterate our view on selective buying while maintaining strong vigil at every rise while avoiding shorts at any levels. Overall, cautious optimism should be continued in the Markets.

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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