MARKET TREND FOR FRIDAY, APRIL 29,
2016
The Markets traded precisely on analyzed
lines yesterday. In absence of a clear breakout, the Markets continued to
resist to its intermittent previous top. While it corrected sharply yesterday,
it tested its 200-DMA as well. Today, we can expect the Markets to open on a
weaker note and look for directions. Today’s possible negative opening will see
the Markets opening below its 200-DMA which is 7853 and this level will
continue to pose resistance to the Markets in days to come. The intraday
trajectory that the Markets forms post opening will be crucial to watch out
for.
For today, the levels of 7853 and 7920 will
act as immediate resistance levels for today. The supports come in much lower
at 7810 and 7740.
The RSI—Relative Strength Index on the Daily
Chart is 57.3267 and it remains neutral as it shows no bullish or bearish
divergence or any failure swings. The Daily MACD stays bullish as it trades
above its signal line. However, it is moving towards a negative crossover in
coming days if the Market conditions do not improve. On Candles, a big black
candle has occurred. Since this has occurred near the resistance area, it has
added credibility to the resistance.
On the derivative front, rollovers remained
well above its 3-Month average. The NIFTY May futures witnessed rollovers of
over 74% as against its 3-month average of 67%.
While having a look at pattern analysis,
the Markets had formed an intermediate top of 7978 on April 21st.
Since then, it tested its 200-DMA twice. Tough it had reported a close very
near to this level couple of days back, we had categorically mentioned that the
Markets have not yet given a clear break out and this level will hold out as
intermediate top until a clear breakout is seen. Yesterday, the Markets
corrected once again from these levels and it did so sharply that it
straightaway tested its 200-DMA. Today, with possibility of a lower opening
once again, the Markets will find itself below the 200-DMA and this level will
continue to pose resistance in the days to come. In case the weakness persists,
further weakening of the Markets cannot be ruled out.
Overall, the Markets are showing distinct
signs of weakness and some more weakness cannot be ruled out if the Markets
closes below its 200-DMA. In such case, it is advised to keep purchase very
stock specific and defensive and avoid absurd exposures. Overall, continuance
of cautious 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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