Daily Market Trend Guide -- Tuesday, February 23, 2016

MARKET REPORT                                                                              February 23, 2016

The session yesterday remained quite stable as the Markets ended the day with marginal gains while displaying strength and continuing to consolidate. The Markets saw a flat and quiet opening as the Markets opened slightly in the red while it formed is intraday low of 7200.70 in the early minutes of the morning trade. The Markets soon crawled back into the positive territory but continued to trade in a much capped range. For the major part of the session, it continued to consolidate but at the same time, continued to fiercely resist to the 7240 levels. It was in the second half that the Markets managed to rise bit more while forming the day’s high of 7252.40. However, the zone of 7240 continued to act as resistance and the Markets came off a bit from those levels. It finally ended the day at 7234.55, posting minor gains of 23.80 points or 0.33% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, February 23, 2016

Analysis for today continues to remain on similar lines that of yesterday. The Markets continued to resist to the levels of 7240 yesterday for nearly entire session. Today as well, we can fairly expect the Markets to open on a flat note and continue to consolidate in the initial trade while the levels of 7240 will continue to act as immediate resistance for the Markets.

For today, the levels of 7240 and 7285 will act as immediate resistance levels for the Markets. The supports come in at 7180 and 7135 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.3427 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD has turned bullish as it now trades above its signal line. We have mentioned in previous two editions about MACD moving towards positive crossover.

On the derivative front, rollovers were seen as the NIFTY February series have shed over 19.41 lakh shares or 9.45% in Open Interest whereas the March series added over 16.69 lakh shares or 36.28% in Open Interest.

If we have a look at pattern analysis, the Markets over previous days have been trading quite on the dotted lines. In line what was analyzed, the Markets have been resisting to the 7200-7240 zone. This levels were the support that the Markets broke on the downside while it formed its low of 6869. In the technical pullback that was witnessed thereafter, these levels have been acting as the resistance levels for the Markets. It becomes important to note that the Markets have been displaying strength while it is consolidating around these levels and there are chances that the Markets moves past these levels. If it does so, the next logical levels it could test are 7450-7525 range but they will still continue to remain in falling trajectory as such.

All and all, the Markets have been displaying strength and may move past the immediate resistance levels of 7240. It becomes important to note, however, that the Markets have shown some divergence from global markets while performing and even if its moves past 7240, it can test higher levels but will continue to remain in overall downward trajectory. It is advised to make selective purchases and use any up moves in protecting profits at higher levels. Positive optimism 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

Daily Market Trend Guide -- Monday, February 22, 2016

MARKET REPORT                                                                                  February 22, 2016

The Markets continued to consolidate precisely on expected lines and the zone of 7210-7240 continued to act as resistance as well as the Markets ended the day with minor gains after oscillating in a given range. The Markets saw a modestly negative opening and after opening on the negative note the Markets slowly crawled back to trade on a flat note. The Markets continued to trade flat with modest losses while it formed its intraday low of 7145.95. It spent major part of the session trading in this manner and remained in narrow 25-odd point of range. However, the final hour and half saw some recovery once again. The Markets recovered its modest losses to trade back into positive. It furthered its gains to form the day’s high of 7226.85. It finally settled the day at 7210.75, posting minor gains of 19 points or 0.26% while forming a similar top but slightly higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, FEBRUARY 22, 2016

The Markets are likely to open on a flat note once again and just like previous session, it is likely to continue to resist to 7200-7240 zone. With flat opening expected, the intraday trajectory that the markets form would be important to what out for. There are all chances that the Markets continue to consolidate around these levels. However, as mentioned often in our previous editions, it would continue to remain vulnerable to minor sell-offs so long as it does not move past 7240 levels.

For today, the levels of 7240 and 7275 will act as immediate resistance levels for the Markets. The supports come in at 7150 and 7115 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.0847 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line. However, it continues to move towards reporting positive crossover. On the Weekly Chart, the Weekly RSI is 37.6840 and this too remains neutral as no bullish or bearish divergences or any failure swings are observed. The Weekly MACD is bearish as it trades below its signal line.

On the derivative front, the NIFTY February series have shed over 10.76 lakh shares in Open Interest. However, still good amount of shorts continue to exist in the system.

On the Daily Charts, it is evident that after the levels of 7240 were breached on the downside, the Markets formed a potential bottom around 6869 and thereafter, showed a technical pullback. However, as mentioned often in our previous editions, the Markets will continue to resist the 7210-7240 zone that it breached on the downside. This was earlier the support and once breached, will now act as resistance for the Markets. So long as the Markets trade below these levels, it will continue to face resistance and also would remain vulnerable to intermittent selling bouts. It will have to move past 7240 levels to have further upsides for the immediate short term.

All and all, so long as the Markets trade below the levels of 7240, we will continue to see vulnerability of the Markets to intermittent sell-offs at higher levels. This will keep certain amount of volatility ingrained in the Markets. If the Markets move past 7240 levels, we can fairly expect another 2 to 3 % of upside from current levels. However, until then, vulnerability to intermittent sell-offs cannot be ruled out. While keeping exposures to moderate levels, continuance 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