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

Daily Market Trend Guide -- Friday, February 19, 2016

MARKET REPORT                                                                             February 19, 2016

Markets continued with its pullback but at the same time it continued to resist around 7200-7220 levels while it ended yet another day with gains. Markets saw a decently positive opening and in the morning trade, it maintained its gains in a steadfast manner. In the late morning trade, it strengthened further to form the day’s high of 7215.10. It resisted nearly three times around these levels, quite on expected lines. It pared nearly half of its gains by late afternoon trade. It formed its intraday low of 7127.85, though it continued to trade in positive territory. The last hour trade saw Markets rising again and it finally settled the day at 7191.75, posting a decent gain of 83.30 points or 1.17% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TODAY FRIDAY, FEBRUARY 19, 2016

Today is the likely day for consolidation for the Markets. While keeping the analysis on the same lines that of yesterday, the Markets will continue to see themselves resisting at 7200-7240 zone. Today, the Markets are likely to open on a quiet note and look for directions. The intraday trajectory that the Markets forms post opening would be crucial to watch out for and the behavior vis-à-vis the levels of 7200-7240 will be important to watch out for.

For today, the levels of 7210 and 7250 will act as immediate resistance levels for the Markets. The supports come in 7130 and 7085 levels.

The RSI—Relative Strength Index on the Daily Charts is 43.1142 and it remains neutral as it shows no bullish or bearish divergence or any failure swings.  The Daily MACD stays bearish as it trades below its signal line. However, it is attempting to move towards possible positive crossover in coming days if the Markets consolidate.

On the derivative front, the NIFTY February futures have added further over 5.24 lakh shares or 2.43% in Open Interest. This signifies addition of fresh longs into the system.

Going by the pattern analysis, the Markets have expectedly resisted to the 7200-7240 zone. These are the levels that the Markets breached on the downside and therefore the same are acting as resistance on its way up. It is important to note that the Markets are unlikely to breach its previous lows even if it corrects a bit. Though the Markets may correct from higher levels and tend to consolidate in a broad range, the previous lows are not likely to be tested unless the Union Budget remains problematic. The reason being – in the previous week and a half when the Markets are oscillating in a broad range, there has been evident increase in volumes and this is a sign of possible accumulation. However, this remains purely indicative at this juncture.

Overall, the Markets may remain little volatile and may oscillate in a given broad range. The Markets may still remain vulnerable to selling pressure around 7200-7240 zone and therefore we continue to reiterate our view of keeping the overall exposure moderate and remaining vigilant at higher levels. The cautious view is reiterated given the fact that the Markets are yet to move past the 7200-7240 zones.

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