Friday, November 18, 2011

Daily Market Trend Guide -- Friday, November 18, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets continued with its “structured  trend” as pointed out in our yesterday’s special edition of Daily Market Trend Guide as it moved in a capped range for the most part of the session and finally gave up again in the last hour and half and in the process ended the day with deep cut and while continuing to form a lower top and lower bottom on the Daily High Low Charts.



For today, such behavior of the Markets will continue taking cues from the global markets.



For today, expect the Markets to open on a subdued note like yesterday and remain in the “unnatural grip” of few players as it has been in last couple of sessions and look for directions. However, it would continue to depend upon the intraday trajectory it forms  and will get dictated by it. For today, the levels of 4905 and 4875 are supports on Charts whereas the levels of 4990 and 5025 are resistance as per the Charts.



The RSI—Relative Strength Index on the Daily Chart is 36.5476 and it has reached its lowest value in last 14-days which is bearish. However, it still do not show any negative or bearish divergence on the Charts. The Daily MACD continues to trade below its signal line.



In continuation of what we pointed out in our yesterday’s special edition, our point of the Markets being in “unnatural grip” is vindicated with few observations. The Markets gets bulk of its volumes in the last hour of the trade. Further, if one analyzes, the intraday patter of 5 out of 6 sessions have been strikingly similar. Further, while moving up from 5000 levels and coming back, the Markets have completely ignored the 100-DMA (it  never resisted it and never took support also) and this is completely in defiance of technical parameters and completely unnatural. In addition to this, the Markets have had a similar trend irrespective of rise or fall in Open Interest in NIFTY and stock futures. This too is unnatural parameter. Having said this, the Stock Futures and most of the components of NIFTY are nearly OVERSOLD and have big outstanding Open Position signifying shorts in the system while NIFTY has lost 354.60 points or massive 6.89% in six sessions while creating huge shorts in most of the stock futures and PCR dropping to 1.02. It is advised, again, to refrain from aggressive positions and maintain cautious outlook for the day.


Milan Vaishnav, 
Consulting Technical Analyst, 
+91-9825016331 

Thursday, November 17, 2011

Daily Market Trend Guide -- Thursday, November 17, 2011 - Special Edition (Published in the Morning before the Markets opened)

A SPECIAL NOTE                                                                                           November 17, 2011
 
The Markets had an extremely volatile session yesterday wherein the NIFTY moved nearly 200+ points intraday to end the fifth session into the red on a heavy volume and continued to form a lower top and lower bottom on the Daily High Low Charts.

The purpose of this Special Note is to bring few points to the notice. Yesterday, the Markets opened on a lower note and remained so for the entire session but the Markets made an attempt to recover in the last hour of the trade. The Markets recovered all of its morning losses in the later afternoon trade. But  exactly at that point of time, the Markets saw a very violent and sudden fall and saw the NIFTY losing over 80-odd points in span of just 5 minutes. Just after that, in next remaining half hour or so, it recovered over 100-odd points from that low to give a new day’s high. This is extremely artificial and “controlled” movement of the Markets which almost entire media failed to give reason of or failed to analyse the cause. We need to bring to the notice of the investors that the Markets, in last couple of session, is deliberately moved and controlled by few entities, big enough to manipulate the system. A systemic weakness has again been abused by few big FIIs and the regulator, as always, will fail to curtail this at this time too. NIFTY saw movement of 200-points in span of just half hour giving both highs and low of the day in the same time frame.

It is sad to know that it is the retail small investor, who again, as always, bears the burnt of such systemic abuses.

For today, we will gain see the Markets opening on a subdued note. For today, the levels of 5005 and 4980 shall continue to act as supports and the levels of 5070 and 5125 shall act as resistance as per the charts. The RSI—Relative Strength Index on the Daily Chart is 41.7944 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any negative / bearish divergence. The Daily MACD continues to trade below its signal line.

Having said this, the NIFTY Futures have shed 13,18,900 shares in open interest which shows short covering from lower levels. Further, the NIFTY Put to Call Ratio (PCR) has dropped to 1.13 from 1.21. This signifies that though NIFTY has shed open interest, there is discomfort around 5000  levels and 5000 Call to have added massive open interest and thus, this level is likely to act as statistical support.

IT IS  IMPORTANT to note that the Markets have been defying all technical inputs from the Charts and this is possible only when it is being influenced by few big players while abusing the system. In such case, it is advised to refrain from taking aggressive positions on either side, specifically avoiding shorts as there can be a short trap as the Markets may see sharp short covering. While avoiding shorts, a cautious outlook is advised for today, as so far as technicals are concerned, Markets should have a limited downside given the pattern and F&O statistics. Cautious optimism is advised.


Milan Vaishnav, 
Consulting Technical Analyst, 
+91-9825016331 

Wednesday, November 16, 2011

Daily Market Trend Guide -- Wednesday, November 16, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a very weak last hour and half of trade yesterday where it saw sudden paring after spending the entire session in  a very range bound trade as  it went on to end the fourth session in a raw with losses and thereby forming a lower top and lower bottom on the Daily High Low Charts.

Today’s session would be very critical would see the Markets trying to avoid entering into a short term bearish phase.

For today, expect the Markets to open on a flat to mildly negative note and look for directions. The intraday trajectory would be all the more important today and the intraday trajectory that the Markets form today will decide if the Markets are to see further weakness in coming sessions or not.

For today, with flat to mildly negative opening expected, the levels of 5040 and 4980 are expected to act as supports and the levels of 5135 and 5170 shall act as immediate resistances.

The RSI—Relative Strength Index on the Daily Chart is 44.13 and it has reached its lowest value in last 14-days which is bearish. However, this time, it does not show any negative / bearish divergence. The Daily MACD continues to trade below its signal line and is bearish in the short term, showing very nominal signs of improvement.

Now, the most critical part of the story. The 50-DMA of the Markets today at Close is 5068.62 and it is very critically important to see that the Markets trades above this levels and sustains above this levels. In case of weaker opening, it would be very essential for the Markets to move past this level and sustain above this in order to avoid getting further weak. The Close will have to be above this level would be necessary for the Markets if it has to avoid entering into immediate short term bear trend.

Given this reading, it is advised to avoid fresh purchases until the directional orientation gets clear and at the same time, it is also advised to avoid short positions in the Markets as there may be chances of stability returning given the global cues. A cautious approach with tinge of optimism is advised for today.

Milan Vaishnav, 
Consulting Technical Analyst, 
+91-9825016331 

Tuesday, November 15, 2011

Daily Market Trend Guide -- Tuesday, November 15, 2011

MARKET TREND FOR TODAY

The Markets continued to reel under pressure for the third day in a row as it expectedly failed to maintain a positive trajectory after a strong opening and in the process, failed to capitalize on it as it ended the day with modest losses after paring all of its gains. In the process, the markets have formed  higher top  but lower bottom on the Daily High Low Charts.

For today, we have a critical session ahead as the trend and behavior of the Markets today shall not only decide the trend for today, but also  for next couple of sessions to come.

For today, expect the Markets to open on a mildly negative note and look for directions. The Markets are expected to open flat and thus continue to critically depend upon the intraday trajectory that it shall form during the day and it would continue to remain critically important to decide the trend for today. For today, the levels of 5190 and 5230 shall act as resistance and the levels of 5110 and 5090 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 49.5363 and it has reached its lowest value in last 14-days which is bearish. Also, RSI has set a new 14-day low whereas NIFTY has not and this is bearish divergence. The Daily MACD continues to trade  below its signal line.

On the other hand, on the Candles, A engulfing bearish pattern has occurred. When this occurs during a downtrend, which is the case with NIFTY, it indicates a bullish reversal. However, this need confirmation.

Along with the above reading, the Markets have shown significant addition of Open Interest across all stocks and NIFTY futures. This shows considerable addition of short positions which are likely to act as support on lower levels. Also, FIIs have remained net buyers and the volumes too have remained much on the lower side yesterday. All and all, this signifies that there will be discomfort at lower levels and we may expect some stability to return. Some amount of volatility may be seen. Selective, stock specific approach while avoiding shorts is advised for today.

Milan Vaishnav, 
Consulting Technical Analyst, 
+91-9825016331 

Monday, November 14, 2011

Daily Market Trend Guide -- Monday, November 14, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had an disappointing session on Friday, and also a disappointing week as it ended the day as well as week with net losses which had just three trading days amid global uncertainties and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

Following overnight developments in the Europe, the Markets are likely to see a strong opening today. We can fairly expect to see strong opening in the Markets and the Markets are expected to trade strong, at least in the initial trade.

Technically speaking, the Markets have closed below its 100 DMA on the Daily Charts but is just within its filter. Further, the European Markets have see big recovery from its intraday lows on Friday and the US Markets have given good strong close and all this is expected to aid in stronger opening today. For today, the levels of 5220 and 5255 are likely to act as resistance and the levels of 5140 and 5110 are likely to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 51.0254 and has reached its lowest value in last 14-days which is bearish. RSI has set a new 14-period low whereas NIFTY has not and this is bearish divergence.  Also the MACD has turned negative as it has reported a negative crossover and trades below its signal line.

However, on the Weekly Charts, RSI is 47.71.70 and its neutral without any negative divergence or failure swing. The MACD continues to remain bullish trading above its signal line.

Having said this, strong positive opening can certainly be expected but at the same time, it would be critically important for the Markets to remain in positive trajectory in order to capitalize on its positive opening. NIFTY has reported shedding of Opening Interest and this needs to be replaced with fresh buying.

All and all, intraday trajectory would be critical to see if Markets is able to capitalize on stronger opening today. With overall technicals and lead indicators in place, it is advised to refrain from shorting and stock specific positions may be taken, Overall, cautious optimism is advised.

Milan Vaishnav, 
Consulting Technical Analyst, 
+91-9825016331