Daily Market Trend Guide -- Friday, February 26, 2016

MARKET REPORT                                                                                February 26, 2016

Though the Markets ended with losses for the third day in a row, the session remained relatively less volatile given the expiry day today. The Markets saw a quiet opening, much on expected lines. After opening flat, the Markets slipped into negative for a brief time in the morning trade. However, it crawled back into green soon after that. It spent the morning session trading with minor gains while it formed its intraday high of 7034.50 while remaining in overall very capped and sideways trajectory. In the second half, the Markets saw some paring of gains once again. It slipped back into negative and kept making fresh gradual lows. By late afternoon trade, the markets went on to from the day’s low of 6964.10. It finally ended the day at 6970.60, posting a net loss of 48.10 points or 0.69% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, February 26, 2016

Going strictly by numerical sense, the Markets had a fresh 52-week low on Closing Levels as it ended the day couple of points below its previous low. However, the Markets have attempted to take a support on the minor Double Bottom Formation. Today, we are likely to see a decently positive opening in the Markets and the Markets are expected to trade in positive at least in the initial trade. The Markets will also react to the Economic Survey coming out later today and the maintaining the possible positive opening would be important.

For today, the levels of 7034 and 7090 will act as immediate resistance levels for the Markets.  The supports come in at 6960 and 6870 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.3237 and it does not show any failure swings. The NIFTY has made a fresh 14-day low but RSI has not yet and this is Bullish Divergence. The Daily MACD as reported a negative crossover and it now trades below its signal line.

On the derivative front, the March futures have begun with adding Open Interest of 44.91 lakh shares or 31.69%. The NIFTY PCR stands at 0.88.

Coming to pattern analysis, the Markets, as of yesterday have continued to remain in a broad trading range that it has formed between 6900 and 7240 levels. On the Closing charts, the Markets have attempted to take support on a minor double bottom formation and it is likely that it would validate that support. On the bar charts as well, though the intraday low remains lower, the Markets are within the overall broad range that is mentioned above. Having said this, today’s expected positive opening is likely to keep the Markets in that given broad range. It would be important to see that the Markets are able to maintain the expected positive gains. Any Close below the current close levels will increase the chances of the Markets testing its intraday 52-week lows.

Overall, the Markets continue to place themselves at a critical juncture wherein it is nearly mandatory to have a positive Close and keep itself in the broad trading range. Any loss at the Close levels will induce further temporary weakness in the Markets. With the current levels near its short term supports, we advise to refrain from creating any fresh shorts. Any longs, at the same time, should be protected at higher levels. Continuance of cautious outlook is advised for today.

 Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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