Friday, October 11, 2013

Daily Market Trend Guide -- Friday, October 1 2013

MARKET REPORT                                                                             October 11, 2013
Yesterday was a day of positive consolidation in the Markets as the Markets opened modestly positive but traded volatile on the both sides while finally ended with minor gains. The Markets opened on a modestly positive note and after trading positive in a very narrow and capped range, it dipped into the red to give the day’s low of 5979.80. Post this formation of low, the Markets gradually crawled back into the green and went on to give day’s high of 6033.95. The markets pared this recovery as well to trade flat again in the late afternoon trade. It saw some recovery towards the end again and it finally ended the day at 6020.95, posting a minor gain of 13.50 points or 0.22% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Taking cue from the positive and strong global Markets, our markets as well are likely to open on a stronger. The Markets would be affected by the Infosys results today and also if it follows global cues and opens strong, it would open near the temporary top that it had formed and it would be critically important to see if the Markets sustain the opening strength and capitalize on the strong opening.

For today, the levels of 6075 and 6130 are immediate resistance levels on the Charts. Supports exist much lower at 5965 and 5910 levels.

There are signs of weariness on the lead indicators. The RSI—Relative Strength Index on the Daily Chart is 61.9990 and it shows no failure swing. However, NIFTY has set a new 14-day high while RSI has not and this is BEARISH DIVERGENCE. The Daily MACD is bullish as it trades above its signal line. 

On the derivative front, NIFTY October futures have added 5.99 lakh shares or 3.69% in open interest. This shows that in yesterday’s consolidation no major unwinding was reported and some moderate buying was seen.

Given the above reading, the Markets would open on a critical juncture with two possibilities. First, in case of any bad outcome of Infosys results, it may give knee jerk reactions and may not open with expected strength. On the other hand, if the Markets follows global cues and opens strong, it would open near its key resistance levels it would be critically important to see if it sustain the opening levels. With the bearish divergence on the RSI, some signs of weariness and tiredness is already present in the Markets.

All and all, with this in view, opening levels and the trajectory that the Markets form post opening would be critically important. Even with the positive and stronger opening, we would advice remaining ultra selective in creating fresh positions. Profits in existing positions should be very vigilantly protected even if means booking profit bit early. Overall, cautious outlook is advised for today.

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


Thursday, October 10, 2013

Daily Market Trend Guide -- Thursday, October 10, 2013

MARKET REPORT                                                                                              October 10,2013
The Markets had a robust session after a weak opening yesterday wherein it opened negative, formed the day’s low in and then recovered over 110-odd points to end the day near the high point of the day. The rally was fuelled by a positive trade data which saw the trade deficit narrowing and touching a 30-month low. The Markets opened weak and formed its day’s low of 5877.10 in the morning trade. However, soon after this, the Markets transformed itself into rising trajectory and for the rest of the session kept gradually making new highs. It came back into the green and went on to give the day’s high of 6015.50. It maintained those levels and finally ended the day at 6007.45, posting a net gain of 79.05 points or 1.33% while forming a higher top but lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to take a breather and open on a negative note. The Markets are expected to open on a lower note again and look for directions. The consolidation would be seen again today and the intraday trajectory would continue to remain important. The further up move would be seen only if the Markets move past the levels of 6035.
The levels of 6035 and 6070 are immediate resistance levels on the charts. The supports exist at 5920 levels and further down at 5840 levels. This keeps the Markets in a broad trading range.
The RSI—Relative Strength Index on the Daily Chart is 61.3629 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD, as we had reported yesterday has today given a positive crossover and it is now bullish as it trades above its signal line. However, on the Candles, An Engulfing Bullish Line has occurred. If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with NIFTY), it may be a last engulfing top which indicates a top.  The test to see if this is the case is if the next candle closes below the top of the current (white) candle's real body.
On the derivative front, the NIFTY October futures have added over 7.82 lakh shares or 5.05% in Open Interest. This is a positive indication as this shows that fresh longs were added after two days of short covering and shedding of Open Interest.
Taking into account the pattern analysis, lead indicators and the F&O data, it can be fairly be concluded that the Markets have finally attempted to form a bottom at its 200-DMA, at least as of now and we can expect a certain upward bias. However, looking at a candle formation, there are mild chances that the Markets consolidates again for a while. However, this would be a range bound consolidation, if at all it happens as the Markets still continue to remain in a broad trading range.
All and all, though we may see a mildly negative opening, we will see the Markets consolidation in the initial trade and remain in a broad trading range. Though it has not achieved a confirmed break out as yet, the bias certainly remains positive. However, the Markets still continues to remain in a broad trading range. Any position that is taken should be taken very selectively and profits should still be vigilantly protected. Positive outlook with mild caution is advised for today.

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



Wednesday, October 9, 2013

Daily Market Trend Guide -- Wednesday, October 09, 2013

MARKET REPORT                                                                                             October 09, 2013
The Markets saw a strong opening on back of RBI steps to increase liquidity in the system but as expected, the euphoria subsided as the Markets slowly pared its gains but ended the day on a modestly positive note. The Markets saw a stronger opening and in the first hour of the trade, gave its intraday high of 5981.70. However, this euphoria subsided as the Markets started to pare its gains slowly but steadily. By afternoon trade, it had pared most of its gains and traded modestly in the positive. In the last hour and half of the session, the Markets did make a feeble attempt to regain strength but gave up again. It finally ended the day at 5928.40, posting a modest gain of 22.25 points or 0.38% though it formed a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today as well, we will see the Markets opening on a modestly negative note as look for directions. As the Markets remain in consolidation phase, as like yesterday, the intraday trajectory would be crucial. The Markets have continued to remain in a broad trading range and it is likely to continue to remain in such consolidation phase for a while.

For today, the levels of 5980 and 6025 are immediate resistance levels on the Charts. The supports continue to exist at 5910 and further at its 200-DMA at 5840.

The RSI—Relative Strength Index on the Daily Chart is 57.4943 and it continues to remain neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD too remains bearish as it trades below its signal line. However, during this consolidation phase, it is moving towards attempting a positive crossover.

On the derivative front, NIFTY October futures have shed over 5.60 lakh shares or 3.50% in Open Interest. This is little negative as no fresh longs were seen yesterday. On the contrary, there has been unwinding of long positions from higher levels as evident from the F&O figures.

Given this reading and going by the pattern analysis, there are chances that the Markets may still remain in consolidation phase for some more time. The Markets may continue to positively consolidate and this can keep the Markets to continue to remain in a broad trading range with some amount of volatility ingrained in it.

All and all, the overall reading remains same as that of last few days. The Markets are in consolidation phase and would remain so for some time. Range bound trade would be seen with some volatility ingrained in it. There are chances that post lower opening, we might see either range bound trade or Markets recovering from lower levels. While avoiding shorts, any downside should be used to make fresh selective purchases. However, since directional consensus absent, cautious outlook is continued to be advised for today.

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



Tuesday, October 8, 2013

Daily Market Trend Guide -- Tuesday, October 08,, 2013

Due to a technical glitch, we have not been able to publish your copy of Daily Market Trend Guide in regular PDF Format. The section "Market Trend for Today" is reproduced below in text format. Inconvenience is sincerely regretted.
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MARKET TREND FOR TODAY
The Markets yesterday traded precisely on expected lines as they opened weak, took support near its 200-DMA and ended flat once again and continued to positively consolidate.

Today, expect the Markets to open on a stronger note and look for directions. Though technicals and other factors suggest continuation of consolidation phase, but  RBI's measures to increase liquidity by cutting MSF rate by 0.5% would fuel the stronger opening in the Markets. The intraday trajectory would be crucial as the opening levels would be around the resistance levels and it would be important to see if the trajectory the Markets forms after opening.

For today, the levels of 5950 and 5985 would act as resistance levels. The level of 200-DMA, 5840 and 100-DMA, 5804 would continue to act as immediate support for the Markets.

The RSI--Relative Strength Index on the Daily Chart is 56.3521 and it is neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY October futures shed 14.03 lakh shares or 8.05% in Open Interest. This is a negative indicator as this clearly suggest that the up move that we saw from the lows near the 200-DMA level was squarely due to short covering in the Markets.

If we read only the lead indicators and the techncial charts along with F&O data, it clearly suggest that the Markets are not completely out of the woods. However, given the step taken by the RBI to increase liquidity as mentioned above is likely to set the initial trading tone as positive. However, it would be equally important to see if the Markets are able to sustain the opening gains and capitalize on it further.

All and all, one more point that the Markets would react to later on is the continuing deadlock in the US which may bring in fresh financial crisis. Given all these, even if the Markets opens on a positive note, it is very important to see that we see fresh positions being built up. Though shorts should be still avoided, fresh purchases should be made very selectively. Given all the factors, cautious outlook is continued to be advised for today as well.


Milan Vaishnav,

Monday, October 7, 2013

Daily Market Trend Guide -- Monday, October 07, 2013

MARKET REPORT                                                                                         October 07, 2013
The Markets moved on either side in a broad range on Friday or expected consolidated as it ended the day on a absolutely flat note. The Markets opened on a decently positive note and traded strong in the initial trade but the late morning trade saw sudden paring of gains by the Markets. The Markets came off by over 50-odd points in the late morning trade and even went on to give the day’s low of 5885. From here, the Markets saw a gradual recovery from the day’s low. It slowly crawled back into the green and even went on to give the day’s high of 5950.45 in the late morning trade. This did not sustain either. The Markets failed to sustain at these levels and again saw paring of gains from the high point of the day. The Markets pared all of its recovered gains, dipped in to the red for a while and finally ended the day at 5907.30, posting a absolutely flat close with nominal loss of 2.40 points or 0.04% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today as well, we can expect some consolidation in the Markets to continue. The Markets are likely to open on a modestly negative note and look for directions. With the 200-DMA a acting as support, the Markets are likely to continue to remain in a broad trading range. Intraday trajectory would continue to remain important.

For today, the levels of 5950 and 5980 would continue to act as immediate resistance levels for the Markets. The supports would come in at 5840 in form of 200-DMA and further at 5804 in form of 100-DMA today.

The RSI—Relative Strength Index on the Daily Chart is 56.4249 and it continues to remain neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD is bearish as it  continues to trade below its signal line. 

On the derivative front, the NIFTY October futures have added 98,500 shares or nearly 0.57% in Open Interest. The addition in the Open Interest remains little or insignificant but it shows that no paring of OI is seen and no significant unwinding of positions is seen.

Given the above reading, it is clear from the pattern analysis that the Markets are in a consolidation phase with the two DMAs (200 and 100) acting as support. The Markets would continue to consolidate with positive bias until they maintain levels above these two DMAs. It is likely today that we see the opening on a negative side but the Markets again consolidates from those levels and recover during the day. 

Given the Markets remaining in a broad trading range and with a likelihood that it would consolidate, there are chances that we may see a range bound session with some amount of volatility ingrained in it. However, we advise to strictly avoid any shorts as there is no structural breach on the charts. Any down side or any such consolidation phase should be used to make selective purchases while vigilantly protecting profits. Positive caution is advised as selective out performance would be seen.

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