MARKET REPORT May
11, 2015
The markets had a
strong session on Friday as it ended the day with decent gains but the rally
was seen as a sharp short covering rally. The Markets saw a positive and strong
opening and the Markets was able to maintain the opening gains throughout the
session. Post seeing a better than expected opening, the Markets remained in
the rising trajectory for the entire session. Since it remaining in a upward
rising channel, it kept making fresh gradual highs as well. In the final hour
of the trade, the Markets went on to post its day’s high of 8224.95. It came
off a bit from there but it finally ended the day at 8191.50, posting a very
decent gain of 134.20 points or 1.67% while forming a higher top and higher
bottom on the Daily Bar Charts.
MARKET TREND
FOR MONDAY, MAY 11, 2015
We are likely to once again see a decent and
positive opening today while the Markets attempt to continue with its Friday’s pullback.
However, it should be noted that what we are seeing is a sharp short covering
led rally and therefore the Markets are not completely out of the woods until
we see fresh buying coming in. Having said this, it would be also important to
see the behaviour of the Markets vis-à-vis its 200-DMA levels in event of a
continued rally.
For today, the
levels of 8230 and 8280 will act as immediate resistance for the Markets. The
supports will come in at 8140 and 8075 levels.
The RSI—Relative Strength
Index on the Daily Chart is 40.0112 and it remains neutral while it shows no
bullish or bearish divergence or any failure swing. The Daily MACD remains
bearish trading below its signal line. On the Weekly Charts, the RSI stands at
44.3351 and this too continues to remain neutral showing no bullish or bearish
divergences. The Weekly MACD is also bearish while trading below its signal
line.
On the derivative
front, the NIFTY May futures have went on shed over 12.61 lakh shares or 8.29%
in Open Interest. This is very clear indication, as mentioned before, that the
Friday’s rally has been fuelled absolutely by very heavy and sharp short
covering.
Taking a cue from
pattern analysis, the Markets have attempted to take support at Close levels on
its 50-DMA on the Weekly Charts. The Markets trades above all of its moving
averages on the Weekly Charts. On the Daily Charts, the Markets had breached
its 200-DMA and are now attempting a pullback. On its way up, this very 200-DMA
is likely to pose some resistance on the upside. It would be very important for
the Markets to move past its 200-DMA and while doing so, it also witnesses some
fresh buying rather than merely going up due to short covering.
All and all, we are
set to see some possible positive opening again today. However, initially this
positive movement would be more due to continued short covering. In order to
successfully attempt a pullback, it would be imperative for the Markets to
witness some fresh buying as well. We continue to reiterate out advice on
making bargain purchases, but to a limited extent. Positive caution is advised
for the day.
Milan Vaishnav,
Consulting
Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
