Friday, October 25, 2013

Daily Market Trend Guide -- Thursday, October 25, 2013

MARKET REPORT                                                                                              October 25, 2013
The session had a buoyant start yesterday and it made a strong attempt to clear the key resistance levels of 6250 but the Markets saw these levels continue to act as resistance as the Markets came off from those levels and ended the day with losses. The Markets opened on a positive note and soon went on to give the day’s high of 6252.45 in the morning trade. However, for the fourth time, the key resistance zone of 6230-6250 stood fiercely as resistance. The Markets took a negative turn and kept paring gains to the extent of turning negative. It came off nearly 90-odd points to give day’s low of 6142.95. It saw some minor recovery in the end but still ended the day in negative as it closed at 6164.35, posting a net loss of 14 points or 0.23% while forming a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY
The Markets came off nearly 90-odd points from day’s high yesterday as the zone of 6230-6250 held out fiercely as resistance.  Today as well, expect the Markets to open on a negative note and continue with correction, at least in the initial session. The intraday trajectory would be important to determine the trend for today but overall, the Markets are expected to trade with corrective bias.
The levels of 6230 and 6250 would continue to act as immediate and important resistance for the Markets. The supports come in lower at 6110 and 6075 levels.
The RSI—Relative Strength Index on the Daily Chart is 63.9296 and it has reached its lowest value in last 14-days which is bearish. The Daily MACD continue to trade bullish, above its signal line. On the Candles, the Chart shows possibility of a formation of a top which might indicate a reversal. A doji star occurred (where a doji gaps above or below the previous candle).  This often signals a reversal with confirmation occurring on the next bar. Also, A long upper shadow occurred.  This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
On the derivative front, NIFTY October futures have further shed over 3.47 lakh shares or 1.98%  in Open Interest. This showed that unwinding of long positions continued and some reduction in longs is seen.
Given the above reading, going by both pattern analysis and the F&O data, it is absolutely evident that the resistance zone of 6230-6250 has held out very strongly to the extent that it has become a immediate top for the Markets. No up move shall occur until the markets move past these levels and until this happens, as mentioned in our yesterday’s edition, the Markets would trade in a broad trading range with some volatility ingrained in it with a negative bias.
All and all, in such circumstances, it is advisable to refrain from creating aggressive positions on either side. However, since the Markets are in corrective mode, any downside should be utilized to make selective purchases. Overall, approaching Markets with cautious optimism is continued to be advised.

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




Thursday, October 24, 2013

Daily Market Trend Guide -- Thursday, October 24, 2013

MARKET TREND FOR TODAY

The Markets corrected yesterday on expected lines as the resistance zone of 6230 held out once again. The Markets corrected sharply to intraday low of 6116.80 after the day's high of 6217.95.

Today as well, expect the Markets to open on a flat note and look for directions. The levels of 6230-6250 have become a immediate top for the Markets and the Markets would continue to resist at these levels. Today, we can expect the corrective mood in the Market to continue and expect a range bound session.

The levels of 6230 would continue to act as immediate resistance for the Markets followed at 6250. The supports exists at 6120 and 6075 levels.

The RSI--Relative Strength Index on the Daily Chart is 65.2836 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to trade above its signal line.

On the derivative front, NIFTY October futures have continued to shed 7.03 lakh shares or 3.85% in open interest. This shows net unwinding of long positions and profit taking at higher levels.

It is clear from pattern analysis that the levels of 6230-6250 have become immediate top for the Markets and the Markets would continue to resist at these levels. No sustainable up move shall occur until the Markets move past these levels.

All and all, until the Markets move past these levels, no aggressive purchases should be made. However, on the other hand, any dip or profit taking should be utilized to make selective purchases on lighter note as sector out performance would continue. Overall, positive caution is advised for today.

Wednesday, October 23, 2013

Daily Market Trend Guide -- Wednesday, October 23, 2013

MARKET REPORT                                                                                   October 23, 2013
Markets had an absolutely directionless session yesterday as it continued to consolidate with the levels of 6230-6250 zone continuing to act as resistance. The Markets opened on a modestly negative note but soon crawled back into the green and made the levels of 6220.10 as the day’s high. The Markets thereafter traded in a capped range in the first half of the day. In the afternoon trade, the Markets slipped into the red. It slipped further in the late afternoon trade to give the day’s low of 6181.80. It saw no directional consensus until the end of the session as it kept trading in a extremely capped and narrow range. It finally ended the day at 6202.80, closing absolutely flat with minor loss of 2.15 points or 0.03% while forming a similar top and a higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The analysis for today remains more or less on similar lines. The levels of 6230 have continued to pose major resistance to the Markets and today as well, it would continue to do so. Today, expect the Markets to open on a flat to modestly positive note and look for directions. To the most likelihood, the consolidation in the Markets would continue and profit taking from higher levels cannot be ruled out.

For today, the levels of 6230 and 6250 would continue to act as key resistance zone for the Markets. The supports come in much lower at 6155 and 6110 levels.

The RSI—Relative Strength Index on the Daily Chart is 67.6056 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD continues to trade above its signal line. 

On the derivative front, the NIFTY October futures have continued to shed another 2.17 lakh shares or 1.17% in open interest. This suggests that amid the consolidation that we have been witnessing, there is been minor offloading taking place as well.

Going by the pattern analysis, it is very clearly evident from the Daily Charts that the Markets have continued to resist at the key resistance zone of 6230 and 6250 and will have to move past this zone for a further sustainable up move. In other words, no up move shall until occur until these levels are breached on the upside. Until this happens, we would continue to see consolidation and ranged trading sessions with a downward bias.

All and all, it is likely that the Markets continue to remain in a consolidation state and might continue to see minor profit takings. However, driven by results, some selective out performance might be seen in certain sectors. Given this, shorts should be avoided and very moderate purchases may be made with more concentration on protecting profits at higher levels. Continuance of cautious outlook is advised for today.

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


Tuesday, October 22, 2013

Daily Market Trend Guide -- Tuesday, October 22, 2013

MARKET REPORT                                                                                      October 22, 2013
Though the Markets ended the day with nominal gains, it had more of a corrective session yesterday as it moved in either direction and remained range bound through out the day. The Markets opened on a positive note and soon made its intraday high of 6218.95 in the early hour of the trade. Thereafter, the Markets gradually corrected as it pared its gains and dipped into the negative and dipped into the red. It made an feeble attempt to recover but went on to give the day’s low of 6163.30. However, the last hour of the trade saw some recovery coming in lower volumes as the Markets recovered its losses to trade back in the green. It finally ended the day at 6204.95, posting a net gain of 15.60 points or 0.25% while forming a higher top and higher bottom on the Daily High Low charts.


MARKET TREND FOR TODAY

The resistance zone of 6230-6250 have held out yesterday as the Markets have failed to move past these levels. Today as well, the Markets are likely to open on a modestly negative note and continue with its corrective / consolidation activity and the levels mentioned would continue to act as key resistance zone.

For today, the levels of 6230 and 6250 would act as key resistance levels. The supports come in lower at 6155 and 6110 levels.

The RSI—Relative Strength Index on the daily charts is 67.8025 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD continues to trade above its signal line.

On the derivative front, NIFTY October futures have shed a nominal 3.11 lakh shares or 1.65% in Open Interest. This show some minor shedding of long positions and some unwinding at higher levels as well.
Going by the pattern analysis, it is very clear, as evident from the charts that the Markets have resisted at their key resistance levels of 6230-6250 and until these levels are breached there would be no sustainable up move in the Markets. Also, until these levels are  breach, on the similar lines, they would  continue to act as key resistance zone for the Markets. 

All and all, it is very much likely that the Markets opens negative and continue with its corrective activities at least in the initial trade. Long positions should be taken very selective as selective sectoral out performance would be certainly seen. Aggressive positions and over exposure along with shorts should be avoided. While keeping an vigilant eye on profits at higher levels, cautiously positive approach is advised for today.

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


Monday, October 21, 2013

Daily Market Trend Guide -- Monday, October 21, 2013

MARKET REPORT                                                                                      October 21, 2013
The Markets had an extremely buoyant session on Friday as the Markets opened on a positive note and remained in positive rising trajectory for the entire session as it closed the day with robust gains. The rally was primarily fuelled by fresh purchases on the hopes that the Federal liquidity tapering shall not occur following US Government shutdown impasse. After opening on a positive note, the Markets, throughout the session kept giving new intraday highs as it continued to inch upwards steadily. Towards the end, it went on to give the day’s high of 6201.45 and finally ended the day at 6189.35, posting a robust gain of 143.50 points or 2.37% while forming a sharply higher top and bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The Markets have moved past the critical resistance zone of 6130-6150. Today as well, they are likely to open on a mildly positive to flat note. Any positive opening would take the Markets to its very major resistance level of 6220-6235 zone. It is very likely that the Markets see some profit booking from these levels.

For today, the levels of 6210 and 6130 would act as major resistance levels for the Markets. The supports exist at 6130 and 6055 levels.

The RSI—Relative Strength Index on the Daily Chart is 67.1580 and it has reached its highest value in last 14-days which is bullish. It does not show any kind of bullish or bearish divergence. The Daily MACD continues to remain bullish as it trades above its signal line. 

On the derivative front, NIFTY October futures have shed over 4.17 lakh shares or 2.17% in Open Interest. This shows that some amount of shedding of open positions, or some profit booking has been witnessed at higher levels.

Given the pattern analysis on the Daily Charts, it is likely that the Markets open positive but that opening would cause the Markets to open near its very important and major resistance levels of 6220-6230 levels. The likelihood of the Markets seeing some consolidation / profit taking from these levels is more because if the Markets go ahead and breach these levels as well, it would turn overbought and the rise would get somewhat unhealthy. Even if the lead indicators are analysed, they shows the chances of some bearish divergences occurring in the next few sessions to come.

Overall, given the above reading, there are chances that the Markets see some amount of profit taking from higher levels. If the Markets continue with its up move, the rise would get little unhealthy and we would advise retail investors to refrain from any aggressive buying and continue to protect profits on existing positions at higher levels. Overall, positive caution is advised for today.

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