MARKET REPORT March
29, 2016
The Markets, very much on expected lines,
finally saw some much awaited correction setting in as it opened flat, drifted
lower to test its 100-DMA and ended the day with losses. The Markets saw a flat
opening as it attempted to adjust itself to the global trade set-up as it
opened after holidays. It remained in the positive territory for a very brief
period as it formed its intraday high of 7749.40 in the very early minutes of
the trade. It soon drifted into the red and traded with limited losses in the
first half of the trade. The losses widened in the second half of the session
as the Markets rapidly lost ground. It went on to test its 100-DMA while it
formed its intraday low of 7587.70. Minor recovery was observed and the Markets
finally settled the day at 7615.10, posting a net loss of 101.40 points or
1.31% while forming a higher top but sharply lower bottom on the Daily Bar
Charts.
MARKET TREND FOR TUESDAY, MARCH 29,
2016
The correction that we saw yesterday in the
Markets was much awaited and due as the weakness was evident on the Daily
Charts. Though the Markets took supports at its 100-DMA yesterday, today we can
once again expect a flat opening to the Markets. In the same way, our analysis
remains similar on yesterday’s lines. We believe that the behavior of the
Markets vis-à-vis the 100-DMA would be critical to watch out for. It is likely that
the Markets briefly takes support at these levels but may continue to see
weakness in the later part of the session.
For today, the levels of 7640 and 7690 are
immediate resistance levels for the Markets. The supports come in at 7585 and
then at 7550 levels.
The RSI—Relative Strength Index on the
Daily Chart is 59.1701 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD, however, remains bullish as
it trades above its signal line.
On the derivative front, the NIFTY March
futures have shed over 29.86 lakh shares or 13.74% in Open Interest whereas
April series added over 16.71 lakh shares or 34.08% in
Open interest resulting
in net addition in OI as rollovers continued to take place.
Coming to pattern analysis, the Markets
reacted precisely to its multiple pattern resistance zones of 7720-7750 levels.
Yesterday’s high of 7749 has become a immediate top for the Markets for the
near term and there will be no runaway rally in the Markets until it moves past
7750 levels. Until this happens, we are likely to witness some more correction
in the Markets wherein the 100-DMA and then the pattern support of 7550 will be
the key levels to watch out for. Any breach below 7550 levels will bring in
some more weakness in the Markets. On the upside, the zones of 7720-7750 will continue
to act as immediate key pattern resistance formed by falling trend line drawn
from 8600 levels will continue to pose resistance.
Overall, the Markets may continue to
witness intermittent pullbacks but as mentioned earlier, there will be no
runaway rally until the Markets moves past 7750 levels. Just like on yesterday’s
analyzed lines, we continue to reiterate to continue to protect profits with
every rise and lay more emphasis on protection of profits. Purchases may be
done, but on very moderate levels. Continuance of cautious outlook is advised
for today.
Milan Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical
Market Analysts, (ATMA), INDIA
+91-98250-16331
