MARKET REPORT April
04, 2016
The Markets on Friday continued to
consolidate and the levels of 7750 remained sacrosanct as the Markets ended the
day with modest losses. The Markets saw a negative opening and it remained
negative throughout the session. After seeing a modestly negative opening and
trading briefly in a capped range in early morning trade, the Markets rose to
form a day’s high of 7740.15. While it never went in to the positive territory,
it did face resistance near 7750 levels. The Markets then immediately retraced
from these levels and kept making gradual lows. It went on to make the day’s
low at 7666.10 coming off nearly 75-odd points from the high point of the day.
The final hour of the trade saw some recovery coming in and the Markets finally
settled the day at 7713.05, posting a net loss of 25.35 points or 0.33% while
forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, April 4,
2016
Today’s analysis once again continues to
remain on similar lines that of entire previous week. The Markets have ended
below 7750 levels and this level will continue to pose resistance to the
Markets. Today, we can expect to have a modestly positive opening but at the
same time, the zones of 7740-7760 will continue to pose important resistance to
the Markets. The behavior of the Markets vis-à-vis these levels will be
critical to watch out for.
For today, the levels of 7740 and 7760 will
act as major pattern resistance levels. The supports come in at 7660 and 7610
levels.
The RSI—Relative Strength Index on the
Daily Chart is 62.43 and it remains neutral showing no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it continues
to trade above its signal line. On the Candles, a long lower shadow occurred. Such
candles, which are very similar to Hanging Man have a potential to stall
up trends, at least on temporary basis. Similar pattern is observed on Weekly
Chart as well. On the Weekly Chart, the
RSI is 50.84 and this too remains neutral. The Weekly MACD stays bullish
trading above its signal line.
On the derivatives front, the NIFTY April
futures have shed over 3.56 lakh shares or 1.89% in Open Interest. This shows
some unwinding of long positions from higher levels in the Markets.
Coming to pattern analysis, the Markets
have been distinctly resisting to the levels of 7740-7760 zones. These levels
represent a important pattern resistance in form of a falling trend line drawn
from 8600-levels. It is very much evident that for any sustainable up move, the
Markets will have to move past these levels. Also, until the Markets moves past
these levels, there is no likelihood of any runaway rise in the Markets. Until
this happens, we will continue to see the Markets consolidate and oscillate in
a trading range while remaining vulnerable to selling pressures from higher
levels.
Overall, the Markets are likely to see
themselves resisting at 7740-7760 zones. Also on the Daily and Weekly Charts,
the pattern formation distinctly shows some possibilities of the Markets
halting its up moves, at least on temporary basis. Fresh and sustainable up
moves shall occur only above the 7740-7760 levels. Until this happens, we once
again continue to reiterate our cautious view on the Markets and advise
vigilant protection of profits at higher levels.
Milan Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical
Market Analysts, (ATMA), INDIA
+91-98250-16331
