MARKET TREND FOR THURSDAY, MAY 05,
2016
We continue to keep today’s analysis on
more or less on similar lines. The Markets have continued its moderate drift
over couple of days and is likely to continue to do so. Today, we can once
again see the Markets opening on a quiet note and look for directions. Some up
move can be seen but it would be extremely important to see if the Markets are
able to sustain any intermediate up moves. The intraday trajectory of the
Markets would be important to watch out for.
For today, the levels of 7750 and 7810 will
act as immediate resistance for the Markets. The supports come in at 7675 and
7610 levels.
The RSI—Relative Strength Index on the
Daily Chart is 47.3244 and it has reached its lowest value in last 14-days which
is bearish. It does not show any bullish or bearish divergence.
The Daily MACD
remains bearish as it trades below its signal line.
On the derivative front, the NIFTY May futures
have shed over 6.03 lakh shares or 3.05% in Open Interest. This certainly
suggest offloading / unwinding of long positions in the Markets. The NIFTY PCR
stands at 0.82 as against 0.86.
Coming to pattern analysis, the Markets
have continued to drift steadily after it’s broke its 140-odd point trading
range which had support at its 200-DMA which stands at 7840. This level, i.e.
200-DMA will continue to pose resistance to the Markets in the immediate short
term until the Markets move past this
level. Having said this, if the weakness persists, the Markets are likely to
test its pattern support at 7675 levels. If this level is breached, we will see
some more weakness creeping into the Markets. On the up side, they are likely
to remain capped in a limited range. Any
weakness will not rule out the possibility of the Markets testing 7550 levels
wherein multiple supports converge.
Overall, we may see some stability
returning to the Markets. However, there are chances that this remains a
temporary affair and any up moves may get possibly sold into. The lead
indicators read along with the F&O data suggest that we may continue to see
some more weakness in the immediate short term and any respite from this, if
any, will remain temporary. Fresh buying may be done at lower levels but at the
same time, profits should be protected with every up move.
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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