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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Thursday, February 18, 2016

MARKET REPORT                                                                                   February 18, 2016

The Markets moved in a quite predictable range today as it oscillated in a given range and ended the day with modest gains. The Markets saw a flat start and did not open as much stronger as was expected. It soon dipped into the negative territory and in the first hour of the trade slipped to the day’s low of 6960.65. The remaining morning session was spent recovering from the lows as the Markets nearly traded flat at one point of time. In the afternoon trade, the Markets slipped a bit again but the last hour and half of trade saw sharp recovery coming in. The Markets went back to trade in positive territory and further went on to form the day’s high of 7123.70. It finally settled the day at 7108.45, posting a net gain of 60.20 points or 0.85% while still forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, FEBRUARY 18, 2016

Today’s analysis continues to remain more or less on similar lines that of yesterday. The markets are likely to see a modestly positive opening but once again, the levels of 7200-7240 will continue to act as resistance zone for the Markets. With no signs of confirming bottoms so far, the behavior of the Markets vis-à-vis these levels would be critical to watch out for. Though, some amount of technical pullback is expected, the Markets continue to remain vulnerable to selling pressures at higher levels.

For today, the levels of 7140 and 7210 will act as immediate resistance levels for today. The supports come in at 7065 and 6990 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.7889 and it remains neutral as it shows no bullish or bearish divergence. The Daily MACD stands bearish as it trades below its signal line.

On the derivative front, the NIFTY February futures have shed 84,150 shares or nominal 0.40% in Open Interest. Going by these figures, we see that still quite good amount of shorts still exist in the system. The NIFTY PCR stands at 0.80 as against 0.78.

While having a look at pattern analysis, we had mentioned yesterday that though the Markets are not expected to breach its previous bottom, it will continue to oscillate in a broad range. Keeping in line with this analysis, the Markets oscillated nearly 100+ points intraday. Today as well, if we expected the Markets to show uptick in the initial trade, it would be continuation of pullback. It becomes important to note that these are technical pullbacks as of now and the Markets have not yet shown any signs of confirmation of bottom so far. The levels of 7200-7240 will remain critical to watch out for. With no signs of bottom formation as yet, the Markets may continue to advance towards these levels but at the same time will remain vulnerable to sell-offs at higher levels as well.

Overall, Markets may open modestly positive and are likely to continue to edge higher. However, with the Markets ruling still below its critical levels, we continue to reiterate our view of cautious outlook on the Markets. Profits, if any, should be vigilantly protected at higher levels and rallies should be used to protect profits until the Markets moves past its critical levels. Continuation of cautious outlook is advised for today.

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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com