MARKET REPORT March
16, 2016
The Markets yesterday remained in
thoroughly corrective mode as it ended the day with losses after continuing to
resist at 7550 levels. The Markets saw a quiet opening and while forming the
day’s high at 7545.20 in the very early minutes of the trade, spent the morning
trade in a capped range with limited losses. The rest of the session saw the
Markets forming a falling channel and it remained in this trajectory for the
entire session. The Markets saw itself gradually and steadily losing ground
while it remained in downward trajectory. By end of the session, it went on to
form day’s low of 7452.80. It showed no signs of recovery and it finally
settled the day at 7460.60, posting a net loss of 78.15 points or 1.04% while
forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, MARCH 16,
2016
The Markets have kept the resistance levels
of 7550 sacrosanct and have continued to resist at those levels. Today, we can
expect a modestly positive opening in the Markets and the intraday trajectory
would continue to remain important. There has been no structural breach on the
Daily Charts and even if the Markets correct a bit more, it would be perfectly
within acceptable range. Only a breach below 7370 will be a reason to worry.
For today, the levels of 7510 and 7550 will
continue to act as immediate resistance for the Markets. The supports come in at 7425 and 7370 levels.
The RSI—Relative Strength Index on the
Daily Chart is 55.8926 and it remains neutral as it shows no bullish or 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 1.60 lakh shares or 0.74% in Open Interest. This remains
a nominal figure and the NIFTY PCR stands at 0.95 as against 0.96.
Coming to pattern analysis, after consolidating
for nearly 8 sessions in sideways trajectory, the Markets continued to resist
to 7550 and after resisting to this level for multiple times, it showed some
amount of moderate correction yesterday. Just to refresh, this level of 7550 is
a triple bottom level of a descending triangle that the Markets breached on the
downside and therefore it is now acting as a resistance on its way up. The
Markets have supports at 7425 and further down at its 50-DMA at 7370 and even
if the Markets corrects up to this level, there will be no structural breach on
the Charts. Any breach below 7370 will be a reason to worry for the Markets in
the immediate short term.
All and all, the eyes are on the FOMC meet
as well which is scheduled later today. There is no expectation of a rate hike
and the Fed Commentary would be important to watch as well. Today, overall, the
Markets are expected to trade in a range with some amount of caution ingrained
in it. The movements are expected to be range bound and it is advised to keep
the purchases very selective and moderate while adopting a moderately cautious
outlook on the Markets.
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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