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Daily Market
Analysis
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Copyright : Vivek Patil Email : asa1@vsnl.com Phone : 9869280521

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As we discussed, “first lower high-low after 4 days … Since 29th Jan’18

top, Index showed rising segment thrice, but none of them could show more
than 3-4 days of +ve bias … today could be about follow-up to late recovery
… watch if the Bulls can force Index strengthen & close above yesterday’s
high … initial cues are -ve … we are watching if -ve bias remains restricted
to just 2-3 days or not … if c-leg ended on 9th ‘Mar, the Index could still
have 4 more days to generate faster retracement of c-leg … Watch if Bulls
can take advantage of this leeway. Failure could encourage Bears … ”

Sensex opened flat, but initial attempt to move above previous day’s high
failed by 9 pts. This prompted Bears to turn active. Losing 229 pts intra-day,
Index finally settled 150 pts or 0.4% lower. Most sectors ended flat to -ve.
However, out-performance of select stocks in Small-Cap & Mid-Cap
universe turned the A/D Ratio marginally +ve.

Copyright : Vivek Patil Email : asa1@vsnl.com Phone : 9869280521

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The action formed a Bear candle, the range of which was “Harami” or
enclosed inside Wednesday’s high-low. Remember, we had considered
Wednesday’s high-low as crucial in terms of bias.

As per VP’s Bias Theory, a “Harami” candle does not affect the existing
bias, which turned -ve after “lower” high-low on Wednesday. Accordingly,
Wed’s high-low of 33875-580 (Nifty 10420-336) remain crucial even today.

This means, weakness/close below 33580 (Nifty 10336) would re-confirm

the -ve bias. Avoiding that, followed by strength/close above 33875 (Nifty
10420), on the other hand, would turn the bias +ve.

Initial cues are -ve today. If the bias re-confirms as -ve, as described above,
then the next downside area to watch is near Monday’s gap-up area, which is
clearly visible only on the Intra-day charts (not on the Daily).

While on Sensex Monday’s gap-up area is at 33286-529, on Nifty it is at

10236-295. From here, accordingly, we may watch if Index shows signs of
stability holding this technically crucial area.

We also cannot also rule out a contracting or sideways phase if the market
does hold Monday’s gap-up area. This may lead to a choppy and tricky
phase for traders. However, a base holding near the gap-up can be +ve later.

Monday’s gap-up area is close to 50-61.8% retracement level to the 4-day

rally from the middle of last week. However, the larger question is whether
Index would fully retrace the c-leg or not, preferably in the next 3 days.

As we said, failure to retrace the c-leg would force us to mark the recovery
from last week as an “x-wave”, which could eventually open 2nd Corrective
downwards. Today, watch if Bulls can force Index to end above Open, or …

Disclaimer
While due care has been taken in preparing the above Analysis, no resonsibility can be or
is assumed for any consequences resulting out of acting on it.

Copyright : Vivek Patil Email : asa1@vsnl.com Phone : 9869280521