MARKET TREND FOR TUESDAY, APRIL 26,
2016
The Markets remained in corrective more
yesterday as it ended the day with modest losses. Today as well, we can fairly
expect the Markets to open on a negative note and look for directions. It has
slipped below its 200-DMA and even though it still remains within its filter,
post expected negative opening, this level of 200-DMA is likely to pose
resistance to the Markets. The Markets have formed a immediate top around 7978
levels and until it moves past this level, we will see the Markets remaining
under consolidation and in corrective mode.
For today, the levels of 7875 and 7910 will
act as immediate resistance levels. The supports come in at 7820 and 7760
levels.
The RSI—Relative Strength Index on the
Daily Chart is 62.3426 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.
On the derivative front, the NIFTY April futures
have shed over 16.80 lakh shares or 10.71% in Open Interest. The May futures
have added over 17.37 lakh shares or 42.74% in Open Interest.
Coming to pattern analysis, we had
mentioned in one of our previous editions that though the Markets have moved
past its 200-DMA, it has not yet given a clear breakout on the Weekly Charts.
Having said this, the Markets failed to move past its 200-DMA which stands at
7861 and after making highs of 7978 levels, have retraced to test those levels
once again. Looking at this, we can fairly conclude that with the expected
negative opening today, this level of 200-DMA will act as immediate resistance
for the Markets once again and the Markets will have to see itself above this
level in order to resume its up move. It is also important to note that Markets
also face similar and more important pattern resistances around these levels.
In other words, there will be no significant and sustainable up move until the
Markets moves past it’s 200-DMA.
All and all, with the Markets ended a notch
below 200-DMA yesterday and with a possible negative opening today, the Markets
have become more vulnerable to some more weakness in the immediate short term.
With the expiry falling in this week, some amount of volatility will also
remain ingrained in the Markets. It is advised to refrain from making any major
fresh purchases and maintain cautious outlook for the day.
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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