Daily Market Trend Guide Monday,
30 March 2015
SPECIAL EDITION
MARKET TREND FOR MONDAY 30 MARCH 2015
A very unusual occurrence
has taken placed on Daily and Moving Averages Charts of Nifty. On day of
expiry of March series, a day before the last trading session, the markets
opened with a downward gap. Though
market opening with a downward gap is not unusual occurrence for the markets, this time it assumed technical significance.
The downward gap
opening of the markets made the markets
to open below its much relied upon and very important supports
of Patterns and more importantly 100 Day Moving Average of Nifty. This rendered these important supports completely
useless as these supports never come into to play as supports due to opening of the markets below these levels.
And to add insult to the injury, because of opening below these supports, the
market faced stiffed resistance at those levels during intraday up move on that
day , technically, supports act as resistance if approached from below !.
Study of Nifty charts
reveals that such ‘ disregard of 100 Day Moving Average as
important support rendering it useless
and throwing it out of play has never occurred at least since January 2008 ! ( See the
Blue Line since beginning in the above Chart )
For today also, the technical charts do not draw an
encouraging picture. Moving averages of
Nifty depicts that markets are ruling
far below its 100 Day Moving average , which is 8531 as of today. This implies
weakness in short term. Pattern analysis also says that the important support
of Lower Line of Rectangle has been broken .
Candlesticks Charts also indicate
that the steady downward pattern is
bearish. MACD continues to remain below its signal line since last
fourteen trading sessions, which is bearish . As of today, important Indicator
RSI exhibits a Failure Swing as it has just reached its lowest value
in the last 14 period(s). This is
bearish.
Where and when this downtrend end ?
Well, there are technical rays of hope.
Important three being the Trend Line on Daily High Low Chart ,
the 200 Day Moving Average of Nifty and the RSI. Longer the trend lines,
stronger the support it offers. In case of Nifty, this Trend Line on Daily High Low Chart has started since Sepetmber 5, 2014. During this
downtrend , this Trend Line is expected to offer significant support to markets.
Technical Reading of this trend
Line in terms of levels of Nifty is
8180. The current downtrend is expected
to at lease halt around this level.
Second important support , which Nifty is fast approaching
is its 200 Day Simple Moving average.
Larger the range in terms of days of a moving average, stronger the
resistance or support as the case may be.
The 200 DMA of Nifty, in a
downtrend is expected to offer strong support. The 200 DMA of Nifty as
on today is 8169.
In addition to the
above two technical positives ,the important indicator, RSI strengths the possibility of the
downtrend ending or at least halting in
near future . In spite the RSI currently
being bearish, it is fast approaching its ‘bottoming out ’ zone.
Thus,
it can be concluded that technical
analysis of Nifty reveals that even
though the very immediate technical picture continues to exhibit
bearishness, the deeper technical analysis
indicates that the end or at least halt of the current downtrend is not far.
Markets are slated to open on flat to slightly positive note today . Going
by the Open Interest Analysis, even though the technicals for today are weak as
above, the markets are likely to remain in positive trajectory at least in the
initial hours of trade. But be vigilant as close approaches.
However, this week
being only of three working days,
markets may be jittery at every rise, which may encounter selling pressure . Volatility due to
short covering may also be seen during this week.
It is strongly
advised not to create fresh shorts , and be moderate in trading during shortened
trading week . As per the
technical analysis given above, we expect this downtrend to at least halt in
near future.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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