MARKET REPORT March
10, 2016
Markets continued to display strength as it
opened on a lower note but recouped all of its losses during the day to end the
day with modest gains. The Markets saw a modestly negative opening but after
trading with limited losses in the initial trade, lost further ground in the
late morning trade. It formed its intraday low of 7424.30 in the morning trade
and recovered a bit to trade with modest losses. The Markets trade was spent
trading with modest losses but the Markets then attempted a rebound. Gradually,
by afternoon trade, it recouped all of its losses to trade flat. The second
half saw the Markets extending its recovery decently. It went on to trade in
the positive and further went on to form the day’s high of 7539. It continued
to resist to the 7530-50 zone. While deliberating around these levels, it
finally ended the day at 7531.80, posting a modest gain of 46.50 points or
0.62% while forming a slightly higher top but lower bottom on the Daily Bar
Charts.
MARKET TREND FOR THURSDAY, MARCH 10,
2016
The Markets faces a critical test of 7550
levels today. Given the global stability, we are likely to see a modestly
positive opening today. However, this likely positive opening is likely to
cause the Markets to open around its major resistance levels of 7550 and it
would be critically important to see how the Markets deals with that zone. The
intraday trajectory that the Markets form would be crucial to watch out for.
There are faint chances that some amount of profit taking, though just intraday,
may be seen from these levels.
For today, the levels of 7550 and 7595 will
act as important resistance levels for the Markets. The supports come in lower
at 7424 and 7405 levels.
The RSI—Relative Strength Index on the
Daily Chart is 61.3047 it has reached its highest value in last 14-days which
is bullish. It does not show any bullish or bearish divergence. The MACD
remains bullish as it continues to trade above its signal line. On the Candles,
and Engulfing Bullish line has occurred. Though this is a bullish
formation, it indicates a short term top for the Markets when it occurs during
an uptrend. However, this always remains indicative and requires confirmation on
the following day.
On the derivative front, the NIFTY March
futures have shed over 4.12 lakh shares or 1.79% in Open Interest. This
indicates some amount of short covering form lower levels.
While having a look at pattern analysis,
two things were observed yesterday. While the Markets were in corrective mode
in the initial trade, it did take support around its 50-DMA on expected lines.
Further, while it recovered, it resisted around its important resistance zone
of 7530-7550 levels. It is important to know that the 7550 levels were the
triple bottom support for the Markets which the Markets broke on its way down.
So, on its way up, these levels are likely to act as important resistance zone.
If the Markets manages to move past these levels, the next logical targets
should be around its 100-DMA. However, before the Markets moves past these
levels, some amount of consolidation with minor bouts of profit taking cannot
be ruled out.
Overall, as mentioned, while some amount of
profit taking bouts cannot be ruled out, the overall undercurrent continues to
remain buoyant. Given this fact, while avoiding shorts emphasis should be
continued on protecting profits at higher levels. Selective purchases too can
be made but in moderate quantities. Overall, positive caution is advised 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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