MARKET REPORT March
28, 2016
Markets continued to display remarkable
strength while also resisting at key levels as it recovered from the lows of
the day to end the day flat with nominal gains. The Markets saw a flat opening
and it soon slipped into the red in the morning trade. After spending the
morning trade in a capped range, the Markets slipped further and by afternoon
session, it went on to form the day’s low of 7670.60. It was in the second half
of the session that the Markets saw recovery coming in. The Markets reversed
its intraday trend, formed a upward rising trajectory and recouped all of its
losses to trade in the positive territory. It went on to form the day’s high of
7726.85. It finally settled the day at 7716.50, posting a flat close with
nominal gains of 1.60 points or 0.02% while forming a similar top and slightly
higher bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, MARCH 28,
2016
Markets will open today after trading
holidays on Thursday and Friday. Today’s opening is likely to witness the
adjustment to the global trade set-up on these two days on which the Markets
was closed. The opening today is likely to remain flat and the Markets will
look for directions and adjustments. There are high chances that we will see
the Markets continuing to consolidate and good amount of chance that it would
witness some minor profit taking from higher levels.
For today, the Markets are face likely
resistance at 7730 and 7745 levels. Supports come lower at 7670 and 7610
levels.
The RSI—Relative Strength Index on the Daily
Chart is 67.0111 and it has just reached its highest value in last 14-days
which is bullish. However, it does not show any bullish or bearish divergence
on the Charts. The Daily MACD stays bullish as it trades above its signal line.
On the Candles, a Doji Star occurred. This has followed a candle with long
lower shadow and it has some potential to pause the up move of the Markets.
On the Weekly Charts, the Weekly RSI is 50.9199 and it has reached its highest
value in last 14-days which is bullish. The Weekly RSI has also formed a fresh
14-week high whereas the NIFTY has not yet and this is Bullish Divergence. The
Weekly MACD remains bullish as it trades above its signal line.
On the derivative front, the NIFTY March
futures have added over 6.39 lakh shares or 3.03% in Open Interest. Some amount
of rollovers has also been witnessed.
Coming to pattern analysis, the Markets
after pulling back over 900-odd points from the lows of the Budget session,
have moved past its important resistance levels of 7550 and also its 100-DMA
thereafter. Following this, it now finds itself near a multiple pattern
resistance once again and there are bright chances that the Markets consolidate
at these levels. There is also fair amount of likelihood that the Markets may
witness some amount of profit taking from higher levels as well. Though the
lead indicators on the Daily and Weekly Chart indicate a bullish set up, the
Markets resisting at its pattern resistances just cannot be ruled out. Some
amount of consolidation would be in fact healthy for the Markets in the
immediate short term. Given the overall set up on the technical charts, runaway
rise is something that would not be expected.
Overall, we also enter the expiry week of
the current derivative series. We will continue to see the trade dominated with
rollover centric activities and this will infuse some amount of volatility in the
Markets as well. The zones of 7730-7765 will act as a major resistance for the
Markets going upwards. While remaining in line with this analysis, we continue
to reiterate our cautious stand on the Markets and advice more emphasis on
protecting profits at higher levels while keeping fresh purchases to moderate
levels.
Milan
Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
