MARKET REPORT March
18, 2016
What a very strong opening and a possible
breakout, fizzled out completely towards end as the Markets failed to keep its
head above the critical levels of 7550. The Markets saw a decently positive
opening and saw itself strengthening further while it formed its intraday high
of 7585.30 in the morning session of the trade. The Markets thereafter traded
in sideways trajectory in a much capped range maintained its gains for the most
part of the session. It was the last hour and half of the trade that the
Markets lost all of its gains. It pared its gains rapidly and at one point of
time traded flat. It also dipped briefly into negative territory and went on to
form its intraday low of 7479.40 coming off nearly 105-odd points from the high
point of the day. It finally settled the day at 7512.55, posting a net gain of
13.80 points or 0.18% while forming a higher top and higher bottom on the Daily
Bar Charts.
MARKET TREND FOR FRIDAY, MARCH 18,
2016
Today’s analysis continues to remain once
again on similar lines. The Markets failed to keep its head above 7550 levels
yesterday. Today, we can once again expect a decently positive opening and the
Markets are once again likely to open just above 7550 levels. Once again, it
would be critically important to observe if the Markets are able to maintain
itself above 7550 levels and attempt to achieve a break out or it fizzles out
yet again and continue to consolidate.
For today, the levels of 7550 and 7585 will
act as immediate resistance levels for the Markets. The supports come in at
7475 and 7430 levels.
The RSI—Relative Strength Index on the
Daily Chart is 58.3649 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD remains bullish as it
continues to trade above its signal line.
On the derivative front, the NIFTY March
futures have shed over 2.28 lakh shares or 1.05% in Open Interest. This very
clearly suggests that there had been some profit taking and unwinding of long
positions from higher levels yesterday.
Coming to pattern analysis, the Markets
have yet again failed to clear the 7550-mark yesterday. It did open well above
that yesterday but during the session, it gradually lost ground and stayed
below those levels. 7550-mark is the triple bottom of a descending triangle
that the Markets breached on the downside and this level is now posing stiff
resistance to the Markets. After having pulled back over 10% from the recent
lows, the Markets have been fiercely consolidating near this level. It would be
critically important for the Markets to move past 7550 in order to gain further
strength and continue with its up move. If the Markets once again fail to capitalize
on the expected positive opening, it would continue to consolidate and elude
the much awaited breakout on the upside.
All and all, the outlook remains positive.
As mentioned often in our previous edition that after having pulled back for
over 10%, the Markets have shown no signs of major profit taking or any
retracement. Instead, it has been consolidating in a given range and attempting
to move past this level. Since no clear breakout has yet been achieved, we
advise to remain selective on purchases and very vigilantly guard the profits
at higher levels. However, the outlook remains apparently buoyant. Positive caution
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
