MARKET TREND FOR TUESDAY, MAY 17,
2016
The Markets have remained within their
pattern formation and the levels of 200-DMA continued to act as support. Today,
once again, the analysis continues to remain on similar lines. The Market is
expected to open on a modestly positive note and look for directions. However, the
opening will have the Markets remain within the symmetrical triangle formation
and the rise may be met with resistance at higher levels and the zones of
7970-7990 will continue to act as major pattern resistance for the Markets.
For today, the levels of 7885 and 7920 will
act as immediate resistance for the Markets. The supports come in at 7812 and
7775 levels.
The RSI—Relative Strength Index on the
Daily Chart is 55.45 and this shows no failure swings. However, the RSI has not
made a fresh 14-period and this is Bearish Divergence on the Daily Charts. The
Daily MACD too continues to remain bearish as it trades below its signal line.
On the derivative front, the NIFTY May
futures have shed yet another 87,525 shares or 0.54% in Open Interest. The
NIFTY PCR stands at 0.92 as against 0.88 yesterday.
Coming to pattern analysis, though the
Markets took support at its 200-DMA which stands at 7812 today and rose nearly
60-odd points from there, it still continues to remain well within the
symmetrical triangle and has shown no break out until today. Even if its shows
some breakout the zones of 7970-7990 will continue to pose formidable pattern
resistance on the upside. Having said this, it becomes important to note that
the symmetrical formation acts both as a continuation and a reversal pattern.
Therefore, until the Markets show directional bias on either side, it is likely
to continue to trade in a ranged manner.
However, the intraday trajectory and
the behavior of the Markets vis-à-vis the levels of 200-DMA will be critical to
watch out for.
All and all, some sectoral and stock specific
out-performance will continue, it is advised to utilize any up move that is
seen to book and protect existing profits. Fresh positions on the long side
should be initiated on extremely selective and cautious note. With no clear
directional bias, shorts should be avoided. While maintaining moderate
exposure, continuance of cautious outlook is advised for the day.
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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