MARKET TREND FOR THURSDAY, MAY 12,
2016
The Markets survived a Mauritian Treaty
scare as it traded precisely on expected lines. Post gap down opening, at one
point of time, it recovered its losses entirely and ended with modest losses.
Today, we can expect the Markets to open on a flat to modestly negative note
and look for direction. The Markets are expected to remain under consolidation
with 200-DMA acting as support and this would be purely on technical grounds.
For today, the levels of 7890 and 7925 will
act as immediate resistance levels for the Markets. The supports come in at
7820 and then at 7750 levels.
The RSI – Relative Strength Index on the
Daily Chart is 56.11 and it continues to remain neutral without showing any
bullish or bearish divergence or any failure swings. The Daily MACD stays bearish
as it trades below its signal line. However, it is moving towards reporting a
positive crossover.
On the derivative front, the NIFTY May
futures have shed over 17.63 lakh shares or 9.54% in Open Interest. This figure
is significant by any means and it shows heavy short covering from lower
levels. The NIFTY PCR stands at 0.92, unchanged from its previous levels.
While having a look at Pattern Analysis,
the Markets have its intermediate top / resistance levels at 7970-7990 zones.
Unless that is cleared, we are not likely to see any sustainable fresh rally on
the upside. However, even without this breakout, the overall trading range of
the Markets remains much wide and this will see the Markets moving in a large
band with the levels of 200-DMA acting as support and the levels of 7970-7990
acting as resistance. This translates into trading range of nearly 170-odd
points and this means that will also see quite good amount of volatility remaining
ingrained in it.
The Markets shall also react to the YOY
Inflation rate and March IIP numbers coming in later today. The Markets will
also react to that in coming sessions as well. Today, we can see the Markets
moving in a capped range and we will witness the stock specific out-performance
and very select purchases taking place. While avoiding shorts, such selective
purchases may be made while remaining vigilant enough to protect profits 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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