MARKET REPORT March
1, 2016
The Markets faced the Union Budget on an
extremely volatile note as it swung over 200-odd points either side and after
such wild swings of 400-odd points ended the day with modest losses. The
Markets opened on a modestly positive note and as expected, it saw a sideways
movement in a narrow trajectory in the morning session. However, once the
Budget proposals started to pour in, the Markets did not take them kindly and
saw a near vertical fall after initial reaction. It went on to form the fresh
52-week low of 6825.80 by afternoon. However, it did also witness a nearly
V-shaped recovery as well. The Markets sharply recovered from its lows and
recovered all of its gains and also traded back into positive while forming day’s
high of 7094.60. After swinging nearly 400-odd points it finally settled the
day at 6987.05, posting a net loss of 42.70 points of 0.61% while forming a
higher top but sharply lower bottom on the Daily Bar Charts.
MARKET TREND FOR TUESDAY, MARCH 01,
2016
Though the Markets posted its fresh 52-week
lows yesterday, it has maintained the double bottom support of 6970 levels at
Close. Today, we can fairly expect a modestly positive opening to the Markets.
We can also expect some more short covering to continue. It would be important
for the Markets to maintain the expected opening gains and maintain itself
above 6950 levels in order to avoid any weakness.
For today, the levels of 7050 and 7195 will
act as immediate resistance levels for today. The supports come in at 6950 and
6860 levels.
The RSI—Relative Strength Index on the
Daily Chart is 37.2984 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bearish as it trades
below its signal line.
On the derivative front, the NIFTY March
series have shed over 4.49 lakh shares or 2.43% in Open Interest. It signifies that
there was massive short covering from lower levels that was seen yesterday.
Coming to pattern analysis, the Markets
breached its previous 52-week low of 6869 while it formed a fresh 52-week low
of 6825. However, as it recovered from its lows, the support in form of minor
Double Bottom at 6970 was held and maintained at Close. Though the Markets may
continue to witness good amount of volatility in coming session, it would be
important and critical for the Markets to maintain levels above 6750 at Close
levels in order to avoid any fresh weakness from creeping in. The Market will
continue to witness intraday volatility and the levels of 6825 will act as
intraday support as well. However, as of now the Markets continue to remain in
its broad range of 6900-7250.
All and all, the Markets are clearly not
out of the woods and it will continue to witness some reactive volatility as
well. Global headwinds are likely to contribute to the technical structure as
well. Having said that, so long as Markets maintain levels above 6850 levels,
selective purchases in moderate quantities may be made. Shorts, at these times,
should be avoided. While guarding existing positions at higher levels, cautious
outlook should be continued for today.
Milan
Vaishnav,
Consulting Technical Analyst
Af. Member: Market
Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts,
(ATMA), INDIA
+91-98250-16331
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