Daily Market Trend Guide -- Tuesday, March 08, 2016

MARKET REPORT                                                                                      March 08, 2016

Markets continued to show strength as it consolidated on Friday while it ended the day with minor gains. The Markets saw a positive opening and saw its intraday high of 7505.90 in the very early moments of the trade. The Markets, thereafter, soon lost grounds rapidly and forming its intraday low of 7444.10 in the morning trade. While forming the day’s range in the morning trade, the Markets spent the rest of the entire session in a very limited and capped range. It traded in the both positive and negative side but did not make any runaway rise. It did not show any weakness or signs of any profit taking either. After spending the session in a narrow 40-odd points range, the Markets finally settled the day at 7485.35, posting a nominal gain of 9.75 points or 0.13% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 08, 2016

The Markets shall open today after a long weekend as the Markets were closed yesterday on account of Mahashivratri. Today, the Markets are likely to open on a quiet to modestly negative note and are likely to consolidate. While the Markets consolidate after nearly 10% pullback post Union Budget, the 50-DMA is likely to act as important support for the Markets.

The levels of 7505 and 7550 are now major resistance levels for the Markets. The supports come in at 7445 and 7420 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.5585 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 trades above its signal line. On the Weekly Charts, the Weekly RSI is 45.8838 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD is bearish as it still trades below its signal line.

On the derivative front, the NIFTY March futures have added 8.99 lakh shares or 4.22% in Open Interest. The NIFTY PCR stands unchanged at 0.99.

While having a look at pattern analysis, the Markets have displayed good amount of strength even after a massive pullback of 10%. While taking support at its recent 52-week lows, the Markets displayed a sharp pullback and even managed to move past its important resistance levels of 7240. While doing so, the Markets also moved past its 50-DMA levels which stand at 7420 today. The underlying strength in the Markets is evident as it showed no signs of profit taking on Monday and in fact consolidated in a given capped range. Today, the Markets are likely to continue to consolidate and while it consolidates, the level of 50-DMA is likely to act as support at Close levels.

All and all, the lead indicators and technical structure on the Charts confirm the underlying strength in the Markets as of now. However, some amount of consolidation and profit taking cannot be ruled out. If the Markets witness a runaway rise, it is likely to face major resistance at around 7550 levels. Given this likelihood, it is advised to again have a very selective approach while making fresh purchases and lay more emphasis on protecting profits at higher levels. However, shorts should be strictly avoided at under currents in the Markets continue to remain strong.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
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