MARKET TREND FOR TUESDAY, April 12,
2016
Markets are likely to open on a flat note
again. However, given that the Markets have ended near the high point of the
day and in absence of any negative triggers, the Markets are likely to continue
with its up move at least in the initial trade. However, speaking purely on
technical terms, the Markets still continue to remain in a broadly defined
trading range and still trades below its important pattern resistance.
For today, the levels of 7700 and 7725 will
act as immediate resistance levels for today. The supports come in at 7650 and
7590 levels.
The RSI—Relative Strength Index on the
Daily Chart is 56.9579 and it remains neutral as it shows no bullish or bearish
divergence or any failure swing. The Daily MACD stays bearish as it trades
below its signal line.
On the derivative front, the NIFTY April
futures have shed over 3.15 lakh shares or 2.01% in Open Interest. This makes
very much evident the amount of short covering that was witnessed from lower levels.
The NIFTY PCR stands at 0.83 as against 0.73.
Coming to pattern analysis, the levels of
100—DMA and the pattern support near 7550 have acted as supports for the
Markets for the immediate short term. The way the sloping trend line have acted
as stiff resistance at levels 7700 and above, the pattern support at 7550 and
the 100-DMA have held out as support at Close levels. Having said this, if we
presume that the falling trend line continues to pose resistance for the Markets
at levels 7700 and above, we will see the Markets consolidating with falling
tops and a flat support. This may see a formation of Descending Triangle on the
Daily Charts.However, this would be too early to
comment. But as of now, the levels of 7700 and upwards will continue to act as
stiff pattern resistance to the Markets.
Overall, the Markets will also remain
cautious to the IIP and March CPI numbers that would come up later in the day
today after the Market hours. The Markets still rules in a range below its
pattern resistance. We reiterate that one should not get carried away with
yesterday’s rise and use any up move that we witness to book and protected
profits rather than creating any fresh positions. 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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