Wednesday, May 18, 2016

Daily Market Trend Guide -- Wednesday, May 18, 2016

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

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.