MARKET REPORT March
23. 2016
The late session recovery saw the Markets
ending with modest gains but it did continue to see stiff resistance at its key
pattern resistance levels. The Markets saw a very quiet and modestly negative
opening though it spent the morning trade trading flat in a very narrow and
capped range. The afternoon trade saw the Markets weakening as it formed a
downward falling channel. It kept making gradual lows and formed its intraday
low of 7643.80 in late afternoon trade. The last hour and half, however, saw a
sharp spurt coming in. Not only did the Markets managed to recoup all of its
losses but went on to trade in the positive. It went on to form the intraday
high of 7728.20, and resisted at its key pattern resistance lines. It finally
settled the day at 7714.90, posting a modest gain of 10.65 points or 0.14%
while forming a higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, MARCH 23,
2016
Today’s analysis remain on similar lines
that of yesterday. The Markets are likely to open on a flat note and look for
directions. With the total pullback being nearly 900-odd points old, and the
Markets very clearly approaching its multiple pattern resistances, it is very
much likely that the Markets consolidate at higher levels. Either the Markets
will consolidate displaying strength just as it did yesterday; or there can be
some amount of profit taking at higher levels.
For today, the levels of 7730 and 7775 will
act as immediate resistance levels for today. The supports come in much lower
at 7643 and 7600 levels.
The RSI—Relative Strength Index on the
Daily Chart is 66.9470 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 continues to remain bullish as it trades above its signal line.
On the derivative front, the NIFTY March
futures have shed further over 4.13 lakh shares or 1.92% in Open Interest.
There has been clear reduction in March positions over two previous days.
Coming to pattern analysis, the Markets
have pulled back over 900-odd points from the lows that it made in the Budget
session. In the process, it consolidated for several days near 7550 levels.
This is the level which was a triple bottom of a descending triangle that the
Markets broke on the downside and this very level acted as stiff pattern
resistance when the Markets were pulling back. Having said this, the Markets
have moved past that as well and also its 100-DMA but now it meets multiple
pattern resistance at present levels. There are high chances that the Markets
may either consolidate at present levels or it may see some minor profit taking
from higher levels.
Overall, it is also important to note that
today is the last working day of the week as Thursday and Friday are holidays
on account of Holi and Good Friday respectively. This may also cause some
caution of weigh in to the Markets ahead of the holidays. Having said this,
even speaking from the technical perspective, we continue to reiterate our
advice to keep purchases very limited and lay more emphasis on 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
