Gemstone Equity Research & Advisory Services

Thursday, March 31, 2016

Daily Market Trend Guide -- Thursday, March 31, 2016

MARKET REPORT March 31, 2016

The Markets posed a strong comeback as it ended the day with robust gains but continued to remain within its pattern resistance levels. The Markets saw a positive opening aided by positive global set up and remained in positive territory throughout the session. The Markets saw a near gap up opening and after this it remained in upward rising trajectory. Such structure of the Markets remained throughout the session and there was no one point where it witnessed any pressure. It kept making gradual intraday highs and towards the end formed its intraday high of 7741.95. It finally settled the day at 7735.20, posting a net gain of 138.20 points or 1.82% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, MARCH 31, 2016

Even after witnessing a robust up move, the Markets still continue to remain within the ambit of its resistance levels. Today would be a critical session as not only the Markets may open flat around its pattern resistance and attempt to find directions, but today is also expiry day of the current derivative series and this would see the session remain severely dominated with rollovers. Any move above 7750 levels will see the Markets testing inching upwards. If the Markets fail to do so we will once again see them consolidating in a given range.

For today, the levels of 7750 and 7795 will act as immediate resistance levels for the Markets. The supports come in lower at 7650 and 7610 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.3221 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY March futures shed over 15.88 lakh shares or 9.90% in Open Interest. The April series added over 28.61 lakh shares or 25.26% in Open Interest resulting in net addition in OI. The NIFTY PCR stands at 1.08 as against 0.96.

Coming to pattern analysis, even though the Markets saw a robust up move yesterday, it still resisted to the falling trend line drawn from 8600 levels. Having said this, with today’s flat opening expected, the Markets will spend some time around this level of 7750 and it would be important to see if the Markets are able to move past this falling trend line resistance. If the Markets are able to move past this level, we can expect to test 7800-7825 levels on the Charts. However, in the event of the Markets not breaching 7750 on the upside, we will continue to remain in broad consolidation with some intermittent selling bouts from higher levels.

Overall, with today being the expiry day, we cannot rule out volatility remaining ingrained in the session. The levels of 7750 will be important to watch out for and some runaway rally would occur if the Markets move past this level. However, with the Markets still trading within the ambit of its resistance levels we continue to reiterate to use every up move to book and protect profits at higher levels. Cautious outlook on the Markets is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
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

Wednesday, March 30, 2016

Daily Market Trend Guide -- Wednesday, March 30, 2016

MARKET REPORT March 30, 2016

The Markets thoroughly consolidated yesterday and ended the day with modest losses though it was able to maintain itself above its 100-DMA. The Markets saw a flat opening and after opening on a quiet note, the Markets put on some minor gains in the morning trade. However, it soon pared those gains in the late morning trade and by afternoon, it went on to slip into negative to form day’s low of 7582.25. Taking support precisely at its 100-DMA the Markets reversed and managed to recoup some of its losses. It continued to oscillate in 40-odd points range for the entire session and at one point formed its day’s high of 7652.90 in the late afternoon trade. However, it pared those gains again and after slipping into negative, finally settled the day at 7597, posting a net loss of 18.10 points or 0.24% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 30, 2016

The Markets are likely to see a positive opening today as the global set up remains positive following dovish Federal Reserve statements. However, speaking purely on technical grounds, the analysis continues to remain similar on yesterday’s lines. The Markets may see positive opening but at the same time, there are chances that the rallies may get sold into. There are chances that the Markets continue to consolidate and the levels of 100-DMA continue to act as support.

For today, the levels of 7650 and 7685 will act as immediate resistance on the Daily Charts. The supports come in at 7589 and 7550 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.8685 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD is bullish as it trades above its signal line. However, the slope of histogram is seen sloping indicating some loss in strength on temporary basis.

On derivative front, heavy rollovers continued as the March NIFTY futures shed over 26.94 lakh shares or 14.37% in Open Interest and April futures added over 47.53 lakh shares or 72.30% in Open Interest indicating net addition in Open Interest.

While having a look at pattern analysis, the overall pattern analysis also continues to remain in line with our yesterday’s view. The levels of 7720-7750 have become immediate top for the Markets and the trend line to which the Markets resisted at these levels is a falling trend line drawn from 8600 levels. With each passing day, this trend line, due to its falling nature, lowers the resistance levels for the Markets. To make it simple, entire 7700-7750 zones have become resistance zone for the Markets as the Markets meets more than one pattern resistance levels. Any runaway rally would occur only if the Markets are able to move past the 7750 level and until that happens, irrespective of the openings that we get, we will continue to consolidate in a capped range and there would always remain a possibility of intermittent selling bouts from higher levels.

Overall, we also enter the penultimate day of expiry of current derivative series and the trade is bound to remain affected and dominated with rollovers. While continuing with our yesterday’s view, we reiterate that any rallies and higher openings should be better utilized to book and protect profits and new positions should be kept limited. Overall, continuance of cautious outlook is advised for today.