Daily Market Trend Guide -- Monday, May 25, 2015

MARKET REPORT                                                                                May 25, 2015

The Markets continued with its up move on Friday as well and ended the day with modest gains but at the same time, it did so in a bit reluctant manner. The Markets saw a quiet and positive opening on expected lines and in the first half of the session it remained in upward rising channel and remained in positive territory. After stable opening, the morning trade saw some strength in the Markets and it kept on making fresh gradual highs while demonstrating some strength.  By afternoon trade, the Markets saw some continuing stability while it formed the day’s high of 8489.55. However, the second half of the trade saw some paring of gains. Markets came off from its intraday highs and pared nearly half of its gains. Though it did not dip into the negative, it finally ended the day at 8458.95, posting a modest gain of 37.95 points or 0.45% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, MAY 25, 2015

We can expect a muted start to the Markets today. The Markets may open on a very quiet note and might continue to trade in a given range while showing little negative bias. Though all cues remain positive some amount of minor weakness may be seen because of some stock specific pressure that we might see today. Today, we also enter into expiry week and therefore we can expect bulk of the activities being dominated with rollover centric actions.

For today, the levels of 8470 and 8550 will act as immediate resistance for the Markets. The supports would come in at 8380 and 8320 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.9866 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. Daily MACD remains bullish as it trades above its signal line. On the Weekly Chart, Weekly RSI is 51.6538 and it remains neutral showing no bullish or bearish divergence or any failure swings. Weekly MACD continues to remain bearish as it trades below its signal line.

On the derivative front, NIFTY May futures have shed over 2.79 lakh shares or 2.12% in Open Interest. NIFTY June Futures have added over 12.70 lakh shares or 50.3.5% in the OI. NIFTY PCR stands at 1.11.

Looking at pattern analysis, the Markets have resisted to its 50-DMA at Close levels and this level is likely to continue to act as resistance in the immediate short term followed by the 100-DMA. On the Daily Chart, there is slight structural weakness as the 50-DMA has cut 100-DMA from above couple of sessions back and this may infuse some very short term weakness for the Markets. Having said this, in event of any weakness, the Markets may not show any significant downside but may continue to trade in a broad trading range with the levels of 200-DMA acting as major support. On the Weekly Charts, all DMAs remain positive and the Markets continue to trade above all of its DMAs.

All and all, keeping this in view, the Markets may not still completely be out of woods. It has continued to face shortage of delivery based buying. At the same time the lead indicators and other factors do not present any significantly negative cues as well. While remaining dominated with rollover centric activities in the coming days, it would continue to show some stock specific out performance. Overall, with no major downsides expected, ranged consolidation is likely to continue in the Markets.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

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