April
08, 2016
MARKET TREND FOR FRIDAY, APRIL 08,
2016
The Markets yesterday took a bearish turn
on expected lines and slipped below its 100-DMA. Today, we can fairly expect
the Markets to open on a flat note and look for directions. It is trading
slightly below its 100-DMA which is 7569 today and near to its another pattern
support of 7550 levels. These two support zones of 7550-7570 will be important
to watch out for and any slip below this will induce some more weakness in the
Markets.
For today, the levels of 7570 and 7635 will
act as important resistance levels for today. The supports come in at 7510 and
7430 levels.
The RSI—Relative Strength Index on the
Daily Chart is 49.6434 and it has reached its lowest value in last 14-days
which is bearish. Also, the RSI has set a fresh 14-period low whereas the NIFTY
has not yet and this is bearish divergence. The Daily MACD is bearish as it
trades below its signal line.
On the derivative front, the NIFTY April
futures have shed yet another 14.10 lakh shares or 8.23% in Open Interest. This
makes unwinding / offloading of positions very much apparent. The NIFTY PCR
stands at 0.76 as against 0.78.
Coming to pattern analysis, as mentioned
often in our previous editions, the Markets have kept the pattern resistance of
a falling trend line sacrosanct and have reacted from there. This makes the
zones of 7700-7750 an immediate top for the Markets. On the lower side, the
100-DMA and a pattern support of 7550 converge to create a lower end of the
trading range. Therefore, this keeps the Markets in a broad trading range of
7530-7750 levels and until the Markets takes any directional bias; we will see
the Markets oscillating in this broad trading range.
Overall, as mentioned, with the Markets
continuing to trade in a broad trading range with the 7550 levels acting as
important support it is likely to oscillate in the given range. However, the
overall bias continues to remain bearish as indicated by the lead indicators,
overall chart structure and the F&O data. Any slip below 7530 will induce
further weakness in the Markets. We continue to reiterate our cautious outlook
on the Markets for today as well.
Milan Vaishnav,
Consulting Technical Analyst
Member: Market
Technicians Association, (MTA), USA
Member: Association of Technical
Market Analysts, (ATMA), INDIA
+91-98250-16331
