Daily Market Trend Guide -- Friday, March 11, 2016

MARKET REPORT                                                                                   March 11, 2016

Though the Markets recovered from the lows of the day, it still ended the day with modest losses and remained in corrective mode very much on expected lines. The Markets saw a modestly positive opening and it formed its intraday high of 7547.10 in the early seconds of the trade. The Markets did not get a less-than-expected positive opening and after that it soon pared its opening gains to trade in negative territory. It continued to drift as it remained in falling trajectory and by afternoon, it formed its intraday low of 7447.40, paring some 100-odd points from the opening highs. The second half, though, saw some recovery coming in. The Markets managed to recover more than half of its losses. It finally settled the day at 7486.15, posting a net loss of 45.65 points or 0.61% while forming a slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, March 11, 2016

The equity markets would react to the ECB decision on rates taken yesterday. Having said this, the Markets have resisted to its important resistance level of 7550 and this level will continue to pose resistance to the Markets in the immediate future. Today, we can expect a quiet opening in the Markets and if the weakness persists, then the levels of 50-DMA, i.e. 7396 is expected to act as support at Close levels.

The levels of 7525 and 7550 will act as immediate resistance levels for the Markets today. The supports come in at 7440 and 7395 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.6246 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY March futures have shed over 8.02 lakh shares or 3.55% in Open Interest. This indicates that some unwinding of long positions took place yesterday.

Coming to pattern analysis, the Markets have resisted to the levels of 7550 as it did not clear this level after multiple attempts while it consolidate over previous couple of days. It becomes important to note that this level is the triple bottom of the descending triangle that the Markets breached on the downside and therefore this level is posing a major resistance while the Markets are attempting a rebound. This level will continue to pose resistance in the immediate future and fresh up move shall occur only after the Markets moves past this level.

Overall, some amount of weakness is likely to persist unless the equity markets react positively to the quantitative easing by the ECB. In any case, the levels of 7550 will continue to pose resistance to the Markets. As mentioned earlier, the levels of 50-DMA is expected to act as support in event of any weakness. It is advised to keep exposures at moderate levels while maintaining a cautious outlook on the Markets.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com