MARKET TREND FOR WEDNESDAY, MAY 18,
2016
Markets are likely to see a modestly
negative opening once again and look for directions. The fact that the Markets
continue to remain in the symmetrical triangle formation keep the analysis for
today once again on similar lines that of yesterday. On the upside, the Markets
continue to face stiff pattern resistance in the 7970-7990 zones and on the
downside, its behavior vis-à-vis the levels of 200-DMA will be critical to
watch out for.
For today, the levels of 7915 and 7940 will
act as immediate resistance levels for the Markets. The supports come in at
7808 and 7750 levels.
The RSI—Relative Strength Index on the
Daily Chart is 57.31 and it remains neutral as it shows no bullish or bearish
divergence or failure swing. The Daily MACD stays bearish as it trades below
its signal line.
On the derivative front, the NIFTY May
futures have added over 4.05 lakh shares or 2.50% in Open Interest. The NIFTY
PCR stands at 0.96 as against 0.92 yesterday.
Coming to pattern analysis, the Markets
continue to remain in a stiff range while forming a symmetrical triangle on the
Daily Charts. The movement of the Markets has narrowed wit it facing stiff
resistance in the 7800-7950 zones and the levels of 200-DMA which is 7808 today
has been acting as support for the Markets. Though the Markets currently lacks
a clear directional bias, the upsides will remain capped at 7970-7990 zones as
these level offer very stiff pattern resistance for the Markets. On the
downside, any breach below the 200-DMA will see the Markets getting weaker in
the immediate short term.
Overall, even if the medium term view of
the Markets may remain bullish, the Markets lack directional bias in the
immediate short term. It is important to note that no sustainable up moves
shall occur until the Markets comprehensively move past 7970-7990 resistance
zones. Until this happens we continue to reiterate to use every up move to book
and protect existing profits.
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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