MARKET REPORT March
15, 2016
The Markets failed to report a clear
breakout as it opened above its critical levels of 7550 but ended the day below
that. The Markets saw a decently positive opening on expected lines and went on
to form the day’s high of 7583.70 in the morning trade. However, as
apprehended, the Markets chose to continue to consolidate as it started to
slowly pare its opening gains. It transformed itself into a falling channel and
continued to slowly pare its opening gains. While the Markets skid below 7550
levels by afternoon, no major selloff was seen. All the Markets did was to
consolidate and at no point of time it dipped into negative territory while it
reported day’s low of 7515.05. Some sideways trade was witnessed in the final
hour and the Markets finally settled the day at 7538.75, posting a net gain of
28.55 points or 0.38% while forming a higher top and higher bottom on the Daily
Bar Charts.
MARKET TREND FOR TUESDAY, MARCH 15,
2016
Today’s analysis continues to remain
perfectly on similar lines that of yesterday. The Markets would again see
itself opening around its critical resistance zone of 7550 and therefore, the
behavior of the Markets vis-à-vis this level would be important to watch out
for. Though all eyes remain on FOMC meet wherein no rate hike is expected, the
lower than expected CPI Inflation number will have positive impact on the
sentiment which clears further room for a rate cut in April Credit Policy
review.
For today, the levels of 7550 and 7590 will
act as immediate resistance levels for the Markets. The supports come in at
7510 and 7460 levels.
The RSI—Relative Strength Index on the
Daily Chart is 60.8378 and it does not show any failure swings. The NIFTY has set
a fresh 14-day high but RSI has not and this has caused Bearish Divergence. The
Daily MACD stays bullish as it trades above its signal line.
On the derivative front, the NIFTY March
futures have shed over 2.49 lakh shares or 1.13% in Open Interest. The NIFTY
PCR stands at 0.95.
Pattern analysis also remains on similar
lines. The Markets have shown good amount of strength as it has consolidated
for nearly six-odd session after pulling back as much as 10% from the lows it
formed on Union Budget day. Having said that, usually such consolidation breaks
out in the direction of its previous move. Therefore, in this case, it is most
likely that the Markets break out on the upside and it has more chances to
continue its pullback / up move. Also, as mentioned often in our previous
edition, the logical targets for the Markets can be its 100-DMA on the upside.
In the event of the Markets not breaching the levels of 7550 on the upside, it
is likely to continue to consolidate in a capped range but it is less likely to
see any major selling pressure from higher levels.
All and all, we continue to reiterate our advice
on making selective and moderate purchases. At the same time, though while
strictly avoiding shorts, profits should be vigilantly protected at higher
levels until a clear breakout above 7550 is achieved. Overall, continuance of
positive outlook 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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