Thursday, August 8, 2013

Daily Market Trend Guide -- Thursday, August 08, 2013

MARKET REPORT                                                                                   August 08, 2013 

The Markets had a utterly volatile session yesterday with the NIFTY moving in either direction to ultimately end the day with modest losses while testing its major Double Bottom Support and continuing to remain in OVERSOLD zone. The Markets opened on a negative note and soon recorded it’s day’s low of5486.85 in the morning trade. After forming this bottom, the Markets attempted to reverse its trade as recovered all of its morning losses by afternoon, but only to pare that recovery again. However, the Markets saw another bout of recovery. It went to trade in the positive territory briefly while forming a intraday high of 5561.45. Again, that recovery too was not sustained as the Markets gave up those gains again, dipped into the negative and ended the day at 5519.10, posting a modest loss of 23.15 points or 0.42% while continuing to form a lower top and lower bottom on the Daily High Low charts.


MARKET TREND FOR TODAY

Today’s analysis once again remains more or less on similar grounds that of yesterday. The levels of 5490-5500 levels are the Double Bottom Support Levels and the behaviour of the Markets vis-à-vis those levels would be critically important. The chances of the Markets holding on to those levels are HIGH as they trade in OVERSOLD zone. Further, volatility may remain as today’s is the last working day of the week, tomorrow being a trading holiday.

For today, the levels of 5561 and 5610 are immediate resistance levels on the Charts. The supports come in at 5485 and 5460 levels.

The RSI—Relative Strength Index on the Daily Chart is 28.1748 and it has reached its lowest value in last 14-days. However, it continues to trade in “Oversold” territory and also, it does no show any bullish or bearish divergences. The Daily MACD continues to trade below its signal line.

On the derivative front, the NIFTY August futures have shed over 11.31 lakh shares or 6.77% in Open Interest. The NIFTY PCR stands at 0.95.

The reading of the Markets is fairly clear. The Markets remains in oversold territory and on its major double bottom support. As mentioned number of times in our previous editions, over 90% of the  Index Components of NIFTY, BankNIFTY and CNX MIDCAP also continue to trade oversold. There continue to exist large short positions in the Markets and the Markets are likely to take support at these levels.

Overall, with the reading of the Markets being oversold along with majority of its components, there are high chances of a long overdue and imminent pullback, unless the Markets continue to defy the technicals. However, it is advised to strictly remain away from creating short positions and also equally advised to not create aggressive long positions. However, very selective stock picking may be done. Overall, continuance of cautious outlook is advised with hope of a long overdue pullback happening any time.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


Wednesday, August 7, 2013

Daily Market Trend Guide -- Wednesday, August 07, 2013

MARKET REPORT                                                                           August 07, 2013
Yesterday was a terrible session for the Markets as the Markets opened weak, went on to defy the pattern support and moved further down towards its major Double Bottom support to end the day with a significant cut. The Markets opened on a negative note and remained in negative zone and territory throughout the session. The Markets gave its intraday high of 5664.90 and that was the opening levels. The Markets very steadily and consistently kept losing ground throughout the session. It went on to give the day’s low of 5521.80. No major recovery was seen from its lows. The Markets very modestly recovered from those levels and finally ended the day at 5542.25, posting  deep cut of 143.15 points or 2.52% and thus forming a sharply lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today the Markets are expected to open on a positive note and give some technical pullback rally. Today, we have very little to analyse except that the Markets are trading near their Double Bottom Support and if it behaves technically, should take support at these levels. Speaking purely on technical grounds a pullback is now very much overdue and imminent. However, in last couple of sessions, the Markets have been squarely defying the technicals especially with over 90% of its components in oversold levels.

Today, the levels of 5590 and 5640 are immediate resistance on the charts. The immediate supports are 5510 and 5475 levels.

Over and above the Index components in oversold levels, NIFTY too has its lead indicators in oversold territory. The RSI—Relative Strength Index on the Daily Charts is 29.1259 and it trades in oversold territory. It does no show any bullish or bearish divergence. The Daily MACD continues to trade below its signal line. 

On the derivative front, the Markets have added massive 14.55 lakh shares or over 9.54% in Open Interest. This figures are very important as for the fist time in last 7-10 sessions that the Markets have shows addition in the Open Interest figures. This also shows that huge number of shorts have been created in the system yesterday.

It is once again important to note that the FIIs have remained net buyers, though marginally. The majority of the sell figures have come in from the DIIs. On the contrary, in last 2-3 sessions, some amounts of shorts too have been piled up by the FIIs in the derivative segment, especially in the Indices. With the NIFTY too now trading oversold along with BANKNIFTY and both of these indices components, it would be TOTAL DEFIANCE by the Markets if it does not give a sustained pullback or a relief rally.

All and all, the advices stands same as that of yesterday. The Markets have no technical reason to go further down. Shorts should be avoided as short trap can occur at lower levels. If liquidity permits fresh purchases may be made very selectively. Otherwise, existing positions should be maintained as all technical inputs points towards a very long overdue and imminent pullback.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


Tuesday, August 6, 2013

Daily Market Trend Guide -- Tuesday, August 06, 2013

MARKET REPORT                                                                                     August 06, 2013
The Markets had a flat session yesterday as it defined the globally stable environment to trade volatile and end the day with minor gains. The Markets opened on a mildly positive note against the expectations of a strong start and after briefly trading in a capped range, went on to give the day’s high of 5721. However, this level was not sustained as the Markets pared all of its gains to trade flat in the afternoon trade. The second session of the trade saw the Markets heading nowhere as it moved / remained in a much capped range. It spent rest of the session in such state and finally ended the day absolutely flat at 5685.40, posting a minor gains of 7.50 points or 0.13% while forming a lower top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today’s analysis remains more or less similar to that of yesterday. However, the Markets are expected to open on a mildly negative note and look for directions. Today’s opening levels would again see the Markets testing its pattern support and it would be important to see if it sees improvement post opening. The intraday trajectory would remain important and it would be important for the Markets to remain near its pattern supports to avoid further weakness.

For today, the levels of 5725 and 5760 are immediate resistance on the Charts. The supports come in at 5650 and 5615 levels.

The lead indicators continue to remain neutral. The RSI—Relative Strength Index on the Daily Chart is 36.1294 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD continues to trade below it’s signal line.

On the derivative front, the NIFTY August futures shed little over 2.05 lakh or 1.33% in Open Interest. This is not a major shedding of open interest, but this still, needs to be replaced with longs if the Markets have to make a sustainable up move.

Having said this, again, the reading remains similar to that of our yesterday’s edition of Daily Market Trend Guide. Over 90% of the components of NIFTY, BankNIFTY, CNX MIDCAP remain nearly OVERSOLD and therefore any further dip may increase the chances of short covering if not buying from lower levels.

All and all, given this reading it is VERY important to note that with any further dip in the Markets, a pullback, somewhat sharp is now long over due and quite imminent. However, we would advice to maintain liquidity and status quo on the positions rather than buying as the directional trend still remains without any consensus. Shorts may be strictly avoided. Overall, the chances of the Markets taking support after a negative opening are high and therefore cautious outlook with little optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


Monday, August 5, 2013

Daily Market Trend Guide -- Monday, August 05, 2013

MARKET REPORT                                                                           August 05, 2013
The Markets continued to end the week on a dismal note as on Friday as well, the NSEL crises as well as the weak Rupee continued to weaken the sentiments as the Markets once again ended the day on a negative note while testing its pattern supports. The Markets opened the day on a modestly positive note and gave its intraday high of 5761.85 in the very early minutes of the trade. Post that levels, the Markets transformed itself into falling trajectory and continued to gradually and steadily lose ground for the rest of the session. It continued to pare those morning gains and dipped into the red by afternoon. It further weakened and went on to test the pattern supports by recording day’s low of 5649. Some modest recovery was seen from those levels and the Markets finally ended the day at 5677.90, posting a net loss of 49.95 points or 0.57% while forming a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today’s session would be critically important for the Markets. The Markets have ended in the red in 8 consecutive sessions in a row and there has been strong deviation of its performance as compared to the peer Markets. Over 90% of the Index components stand oversold and a pullback is imminent especially when the Markets have held on to its pattern support. Expect the Markets to open on a decently positive note and it would be critically important for the Markets to maintain those gains.

For today, the levels of 5760 and 5790 are immediate resistance on the Daily charts. The supports come in at 5650 and 5625 levels.

The lead indicators continue to remain mildly weak. The RSI—Relative Strength Index on the Daily Chart is 35.3733 and it has reached its lowest value in last 14-days. However, it does not show any bearish divergence. The Daily MACD continues to trade below its signal line. On a Weekly note, the Weekly RSI stands at 44.0755 and it is neutral as it shows no negative divergence or failure swings. The Weekly MACD continues to trade below its signal line.

On the derivative front, NIFTY August futures have continued to shed over 9.68 lakh shares or 5.90% in Open Interest. This is certainly a negative reading. This show clear unwinding of positions. It is critically important to see that this gets replaced with fresh buying and long positions. The NIFTY PCR stands at 0.99 as against 1.01.

There are important things to note here. Though derivative figures show unwinding in form of decreased open positions, we have categorically mentioned in our last edition of Daily Market Trend Guide that over 90% of components of NIFTY, Bank NIFTY, CNX MIDCAP, etc., stand OVERSOLD or nearly oversold. Secondly, the Global Markets have been stable and have outperformed the Indian Markets. Further to this, with the Markets holding on to the pattern support and with decently positive opening likely today, we are likely to see relief rally, at least in the initial trade.

As mentioned, a pullback is now long overdue and imminent. Today’s session remain critically important and holding on and capitalizing on the opening gains would be of utmost importance. We continue to advice to strictly refrain from shorts as there is high likelihood of the Markets taking support at current levels. Aggressive buys too should be avoided to maintain adequate liquidity until directional trend gets clear. Overall, though cautious, but positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331