MARKET REPORT March
21, 2016
The Markets on Friday traded perfectly
within technically defined parameters. It ended the day with a decent gain
after it moved past its critical resistance levels of 7550 but halted just at
its 100-DMA. The Markets saw a opening which was little less strong that what
was expected. It did attempt to move past 7550 levels but kept coming off
facing a stiff resistance. The Markets spent the first half of the session in a
sideways trajectory with modest gains and failed to move past the critical
resistance zone. It was in the last hour and half of trade that the Markets saw
a sharp up move. It managed to move past the critical resistance of 7550 and
went on to form the day’s high of 7613.60. It finally ended the day at 7604.35,
posting a net gain of 91.80 points or 1.22% while forming a higher top and
higher bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, MARCH 21,
2016
The Markets once again faces a critical
test today. On Friday, it has attempted to breakout on the upside while moving past
its important resistance levels of 7550. Today, we can expect a modestly
positive start to the Markets. Speaking purely on technical terms, since the
Markets have ended near the high point of the day on Friday, today, it is
expected to continue with its up move. However, today’s expected opening levels
would be around its 100-DMA which is 7614 and it would be important to watch
the behavior of the Markets vis-à-vis this level.
For today, the levels of 7614 and 7645 will
act as immediate resistance levels for the Markets. The supports come in at
7550 and 7510 levels.
The RSI – Relative Strength Index on the
Daily Chart is 62.5776 and it has reached its highest value in last 14-days
which is bullish. It does not show any bullish or bearish divergence. The Daily
MACD is bullish as it continues to trade above its signal line. On the Weekly
Charts, the Weekly RSI is 48.4872 and it has reached its highest value in last
14-weeks which is bullish. Also, the Weekly RSI has formed a fresh 14-week high
and the NIFTY has not yet and this is Bullish Divergence. The Weekly MACD has reported a positive
crossover and it now trades above its signal line and is bullish. However, on
the Candle, a Hanging Man pattern has occurred. This pattern has a
potential to halt the up move temporarily if it occurs after a up move or near
any resistance level.
On the derivative front, the NIFTY March
futures have added over 7.71 lakh shares or 3.59% in Open Interest. The NIFTY
PCR stands at 0.99 as against 0.96 on Friday.
Coming to pattern analysis, the Markets
have attempted a breakout on the upside as it has moved past the levels of
7550. However, it has halted exactly at its 100-DMA which is 7614 yesterday.
This level can act as a resistance at Close levels for the Markets. If the
Markets move past this level, it can test levels of 7650-7695 wherein it meets
yet another pattern resistance. If the Markets choose to consolidate, the
levels of 7550 are expected to lend support on the downside. There are chances
that the Markets may see some short term consolidation. However, the
undercurrent continues to remain buoyant.
It is important to note that the Markets
choosing to consolidate on Weekly basis is very much likely as we have a short
3-day week this time with Thursday and Friday being holidays due to Holi and
Good Friday. Given this fact, even if the undercurrent remains buoyant, it
becomes important to continue to protect profits at higher levels and keep
purchases moderate. Overall, positive outlook is continued for today.
Milan
Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
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