MARKET REPORT March
02, 2016
Markets staged a huge short-covering led up
move and went on to test its original resistance zone of 7220-7240 levels while
it ended the day with strong gains. The Markets opened on a modestly positive
note but it soon gathered strength. It went on to form gradual intraday highs
throughout the session. The strength was evident as the Markets did not gave up
any of its gains even once. It remained in upward rising trajectory for the
entire day there was not even once that they showed any signs of any weakness
or profit taking. Towards the end, it went on to test its critical resistance
levels as it formed its intraday high of 7235.50. After hovering around those
levels for a while, it finally ended the day at 7222.30, posting a net gain of
235.25 points or 3.37% while forming a sharply higher top and higher bottom on
the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, MARCH 02,
2016
Markets displayed massive strength in a
short covering led rally that it witnessed yesterday. Having said this,
speaking purely on technical grounds, the Markets should open higher and
continue with its up move with the next logical resistance coming in at 50-DMA.
Today, given the favorable global set up, it is very much likely that the Markets
may see a strong
opening and technical indicators indicate continuation of the
up move.
For today, the levels of 7310 and 7345 are
immediate resistance on the Daily Charts. The supports come in at 7240 (in case
of gap up opening) and then at 7175 levels.
The RSI—Relative Strength Index on the
Daily Chart is 49.6273 and it has reached its highest value in last 14-days
which is bullish. Also, RSI has formed a fresh 14-day high but NIFTY has not
and this is Bullish Divergence. The MACD has once again reported a positive crossover
and it now trades above its signal line.
On the derivative front, the NIFTY futures
have gone on to shed some amount of Open Interest. This signifies short
covering of open positions. It would be important to see if the Markets see
these being replaced by fresh long positions.
Coming to pattern analysis, though the
Markets have shown a strong up move, it resisted at the important level of
7240. This is the levels that the Markets breached on the downside on its way
down. So, this is the level which is now acting as resistance on the way up. If
we get a positive and stronger opening on the expected line and if the Markets
consolidate at higher levels, this level should once again act as support. In
any case, it would important for the Markets to trade above 7240 in order to
capitalize on expected positive opening.
All and all, with the Markets likely to
open on a stronger note, it is very much likely that it continues to build
further on this. Also, in case of continued up move, it can test its next
logical resistance at the 50-DMA levels of 7443. In event of continued up
surge, any profits should be strongly guarded at such higher levels. Overall,
positive outlook is advised 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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.