MARKET REPORT May
19, 2015
Markets had a buoyant session yesterday especially in the
second half of the session as it moved past its 200-DMA and ended the day with
decent gain. The Markets saw a positive opening on expected lines and remained
in a narrow range with capped gains in the first half of the session while it
continued to resist to its 200-DMA. As mentioned, the second half of the
session some more strength coming in as the Markets witnessed quite decisive
and secular up move. It went on to form the day’s high of 8384.60 and
maintained those gains until the end. It finally settled the day at 8373.65,
posting a decent gain of 111.30 points or 1.35% while forming a higher top and
higher bottom on the Daily Bar Chart.
MARKET TREND FOR TUESDAY, MAY 19, 2015
We can once again expect the Markets to consolidate after
yesterday’s gains and it would be crucially important for the Markets to
maintain levels above of 200-DMA in today’s trade. Today, we can expect a flat
to modestly negative opening and we can see some ranged consolidation in the
first half with the levels of 200-DMA expected to act as support in case of any
weakness. There has been dearth of broad delivery based buying and this is
something that will keep the Markets under some check.
For today, the levels of 8410 and 8465 will act as immediate
resistance for the Markets. The supports will come in at 8305, near its
200-DMA.
The RSI—Relative Strength Index on the Daily Chart is
51.0833 and it has reached its highest value in last 14-days. This is bullish.
It does not show any bullish or bearish divergence or any failure swing. The
Daily MACD is bullish while it trades above its signal line.
On the derivative front, the NIFTY May futures have shed
over 3.85 lakh shares or 2.75% in Open Interest. This once again indicates
short covering and attributes yesterday’s rise more to short covering than
fresh buying.
While looking at pattern analysis, the Markets yesterday
resisted to its 200-DMA in the first half of the session but finally managed to
move past and close above it. It would be now crucially important for the
Markets to maintain itself above 200-DMA. This level is now expected to act as
support in event of any immediate short term weakness. Any breach below this
will bring the Markets back into the broad trading range that it has been
trading in.
All and all, the lead indicators and over all structure of
the Charts point towards positive bias with some amount of short term
consolidation that might happen. However, Markets will also need delivery based
buying to make a sustainable up move apart from just short covering that it is
witnessing. Intermittent volatile bouts cannot be ruled out. Overall, while
maintaining modest exposure, positive caution is advised.
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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