MARKET REPORT March
4, 2016
Markets continued to defy gravity yesterday
as well as it continued to end yet another day with decent gains. The Markets
saw a decently positive opening aided by favorable technical indicators and
global cues. After opening on a positive note the Markets remained in upward
rising trajectory for the entire session. After a brief sideways trade in the
morning, the Markets kept forming gradual intraday highs. Every minor selloff
got absorbed by fresh buying and at no point of time did the Markets showed any
weakness or any intent of profit taking. It went on to move past its 50-DMA as
well while it formed its day’s high of 7483.95. These levels were maintained
and the Markets finally settled the day at 7475.60, posting a decent gain of
106.75 points or 1.45% while forming yet another sharply higher top and higher
bottom on the Daily Bar Charts.
MARKET TREND FOR FRIDAY, MARCH 04,
2016
Today’s analysis continue to remain more or
less on similar lines as the Markets are likely to open on a positive note and
trade with gains at least in the initial trade. The Markets have closed a notch
above its 50-DMA and today’s opening would take it further higher. The NIFTY
has gained nearly 10% after Budget Day’s low this up move has got largely to
the very sharp arbitrage buying by the FIIs. This strength is likely to continue
today as well at least in the initial trade as the Markets approaches yet
another major resistance level.
For today, the levels of 7510 and 7550 will
act as important resistance levels for today. The supports come in at 7425 and
7380.
The RSI—Relative Strength Index on the
Daily Chart is 59.2253 and it has reached its highest value in last 14-days
which is bullish. It does not show any bullish or bearish divergence. The Daily
MACD stands bullish as it trades above its signal line. On the Candles, yet
another rising window occurred. This implies continuation of the bullish
trend in the Markets.
On the derivative front, the NIFTY March
futures had added yet another 13.76 lakh shares or 6.90% in Open Interest. This
indicates addition of fresh long positions in the Markets.
While having a look at pattern analysis,
the Markets have not only moved past 7240 a day before, but have also went on
to move past its 50-DMA which is 7428 today. Today, with likely positive
opening, the Markets are likely to build some more gains in the initial trade
and in event of any mild profit taking or consolidation, the levels of 7428 is
very much expected to act as support. On the other side, if the Markets continue
with its advance, it will approach one of its major resistance zone of
7550-7575. This will remain major resistance zone as this is the triple bottom
of the wide Descending Triangle that the Markets breached on the downside. It
would be healthy if the Markets witnesses some consolidation at these levels as
unabated rise can get little unhealthy especially when the Markets ignores
important resistance zones.
All and all, even though all indicators
continue to point towards continuing bullish environment in the Markets, some
amount of consolidation or profit taking from higher levels cannot be ruled
out. We have an extended weekend this time with Monday being a trading holiday.
Any downticks will help Markets further attempted to confirm a bottom and
reverse its trend. However, until happens, it is now time to exercise caution
and lay emphasis on guarding and protecting profits at higher levels.
Milan
Vaishnav,
Consulting Technical Analyst
Af. Member: Market
Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
