MARKET TREND FOR Thursday, April 21,
2016
We continue to keep our analysis for today
on the similar lines that of yesterday. The Markets are likely to see a
positive opening once again driven by liquidity and positive global markets.
However, at the same time, the intraday trajectory would be important and the
levels of 7950 will be important to watch out for. The Markets have shown a
deteriorating Advance-Decline Ratio with increasing volumes and some
potentially bearish formation on the Charts are hinting towards some
distribution happening with every rise.
For today, the levels of 7940 and 7965 will
act as immediate resistance levels for the Markets. The supports come in at
7860 and 7825 levels.
The RSI—Relative Strength Index on the Daily
Chart is 67.7508 and it has reached its highest level in last 14-days which is
bullish. However, it does not show any bullish or bearish divergence. The Daily
MACD stands bullish as it trades above its signal line. However, on Candles
once again, a hanging man-like candle has appeared. Though it does not
satisfy a exact criteria of it being called a hanging man it certainly
holds the potential to halt the up move at close levels, just like yesterday.
On the derivative front, the NIFTY April
futures have added over 5.17 lakh shares or 3.26% in Open Interest. The NIFTY
PCR stands at 1.08 as against 1.07.
Coming to pattern analysis, the Markets
have managed to keep its head above its 200-DMA which is 7868 today. In event
of any correction, the Markets are likely to test this level at the first
instance. At this juncture, we need to bear in mind that there has been no
clear breakout on the Weekly Charts and as of today, we continue to resist to
the 50-MA on the Weekly Charts. Having said this, given the overall structure
of the Charts, with every rise, the Markets will make themselves more
vulnerable to corrective activity at higher level.
Overall, it is also important to note that
there has been net selling reported by both FIIs and DIIs, though in moderate
quantities. It is also important that the up moves are more prone to corrective
activity from higher levels if they occur with declining market breadth and
increasing volumes as this signifies potential distribution at higher levels.
We continue to reiterate our view on the Markets to use every up moves to book
profits and protect positions at higher levels.
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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