Friday, January 17, 2014

Daily Market Trend Guide -- Friday, January 17, 2014

MARKET REPORT                                                                                        January 17, 2014
The Markets had a severe consolidation yesterday as it remained in very tight range and ended the day on a flat note after moving in either direction. The Markets opened on a modestly positive note and formed its intraday high of 6346.50 in the early minutes of the trade. After hovering around those levels, the Markets slipped and soon pared all of its gains to trade flat. After some sideward movement, the Markets slipped further to give the day’s low of 6299.85 in the afternoon trade. However, from there the Markets did attempt a recovery. It managed to recover all of its losses and trade briefly in the positive. No significant directional bias was witnessed as the Markets spent the rest of the session not moving in specific direction. It finally ended the day at 6318.90, posting a minimal loss of 2 points or 0.03% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we are again likely to see a quiet opening in the Markets. The Markets have attempted a breakout and to give a sustainable upside, it will have to move past its minor double top formation of 6350 as we had mentioned yesterday. The intraday trajectory would be important after opening today and for any up side to sustain, the Markets will also have to see volumes coming in.

For today, the levels of 6350 and 6395 are immediate resistance levels on the Daily Charts. The supports exist at 6290 and 6255 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.3719 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daly MACD  too continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY January futures has added over 8.21 lakh shares or 4.51% in Open Interest and this very clearly shows that there has been lot of addition of short positions in the Markets. In the last session, we have seen overall  premiums contracting as compared to the spot price and this clearly signifies creation of short positions in the system.

Overall, the structure on the Daily Charts remains stable. Going by the pattern analysis, the Markets would encounter resistance near its minor double top formation of 6350. For any up move or a fresh breakout the Markets will have move past those levels with conviction and volumes. However, given the F&O data, the formation is much supportive for a  up side breakout and the bias certainly continues to remain on the upside baring a consolidation of a day or two.

All and all, in the above narrated readings, it is advised to remain light on positions until a directional bias is confirmed. However, given the pattern analysis and the F&O data, shorts should strictly be avoided and any downside should be used for making very selective purchases. Overall, cautious optimism is advised for today.

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


Thursday, January 16, 2014

Daily Market Trend Guide -- Thursday, January 16, 2014

MARKET REPORT                                                                                          January 16, 2014
The Markets after consolidating for a day, resumed its up move much on expected lines as the WPI inflation fell to 5 month low at 6.16%. The Markets opened positive, strengthened further and ended the day with decent gains. The Markets opened on a positive note and traded with modest gains until late morning trade. Markets saw some spikes while it reacted to the numbers coming in and also saw itself coming off its intraday highs. However, the Markets saw it steadily strengthening itself and in the late afternoon trade, went on to give the day’s high of 6325.20. It maintained those levels until the end of the session and finally ended the day at 6320.90, posting a decent gain of 79.05 points or 1.27% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we can expect the Markets to open on a flat to mildly positive note and continue with its up move, at least in the initial trade. The Markets are expected to inch upwards and are likely to test the minor double top formation ahead. The undercurrent continues to remain buoyant and we will see continuation of the up move as such.

For today, the levels of 6360 and 6385 are likely to act as immediate resistance on the upper side. The supports would exist at 6285 and 6250 levels.

The RSI—Relative Strength Index on the Daily Charts is 59.6067 and it has reached its highest value in last 14-days which is bullish. The Daily MACD, as we had reported in our  yesterday’s edition, has reported a positive crossover and it is bullish as it now trades above its signal line. 

On the derivative front, NIFTY January futures have added over 4.60 lakh shares or 2.59%  in Open Interest. This signifies that the Markets have continued to see building of fresh positions and no short covering or any kind of unwinding has been witnessed.

The overall structure and the patterns on the Daily Charts continue to remain intact. The Markets have resumed its up move after critically maintaining the supports of its 50-DMA at the close levels. The Markets shall achieve a fresh breakout once again, taking it to newer heights once its moves past the levels of 6360 with volumes and stays above that.

Overall, with the overall structure remaining stable, the undercurrent and tone of the Markets certainly remains stable and buoyant. It is advised to continue to make selective purchases and any downside or any brief consolidation should be used to make purchases while protecting profits at higher levels. Continuance of positive outlook is advised for today.

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


Wednesday, January 15, 2014

Daily Market Trend Guide -- Wednesday, January 15, 2014

MARKET REPORT                                                                                        January 15, 2014
The Markets had a session wherein it consolidated yesterday after a robust gain a day before on much lower volumes and ended the day with a modest loss, much on the expected lines. The Markets opened on a modestly positive note and formed its intraday high of 6280.35 in the early minutes of the trade. However, immediately after this the Markets slipped into the negative territory. Markets formed a intraday falling trajectory thereafter and remained so for the rest of the session. It kept making new intraday lows and kept losing ground steadily but on very low volumes. It went on to give its intraday low of 6234.15 in the last hour of the trade. It finally ended the day at 6241.85, posting a modest loss of 30.90 points or 0.49% while forming a slightly lower top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

 After a consolidating session yesterday, we can expect the Markets to open on a modestly positive note and look for directions. Today, it might attempt to resume its up move but at the same time, it is also likely to react to the WPI and CPI inflation data coming in later today before noon. Any positive outcome, which is likely shall aid the Markets on the upside. In the same breath, it can also give knee jerk reaction if it turns out higher than what is expected.

Today, the levels of 6290 and 6325 are immediate resistance on the Daily Charts. The supports come in at 6215 and 6190 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.7493 and it is neutral as it shows no failure swings or any kind of bearish or bullish divergence. The Daily MACD is bearish as it trades below its signal line but it is moving towards reporting a bullish crossover.

On the derivative front, NIFTY January futures have  added over 1.70 lakh shares or 0.97% in Open Interest. This shows that some shorts have been added in yesterday’s session and no offloading or unwinding has been observed.

Overall, if we look at the pattern analysis, the Markets have survived the 50-DMA and have successfully taken its support at Close levels after maintaining it couple of times. In event of any downside, this level is likely to act as major support. In other words, the Markets shall have no structural breach so long as it maintains the levels above of 6190. However, this would be consolidation and any significant up move shall occur only after it moves past the levels of 6250.

All and all, given the pattern of the lead indicators, it is very much likely that the Markets resumes its upward movement after some consolidation. The favourable WPI and CPI numbers will certainly aid to it. This is what the lead indicators say, at least as of now. Therefore, while continuing to avoid shorts, any downside should be used to make selective purchases. Overall, cautious optimism is advised for today.

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


Tuesday, January 14, 2014

Daily Market Trend Guide -- Tuesday, January 14, 2014

MARKET REPORT                                                                                        January 14, 2014
The Markets saw a hefty surge backed by banking and IT among other oil and gas stocks as it opened higher, became stronger in the last hour of trade and ended the day with hefty gains supported by heavy FII buying. The Markets opened on a stronger than expected note and spent the most part of the session maintaining those gains and trading comfortably above the 50-DMA. The Markets grew even stronger in the last hour of the trade as it went on to give the day’s high of 6288.20. Markets sustained these gains as well and finally ended the day at 6272.75, posting a robust and hefty gain of 101.30 points or 1.64% while forming a distinctly higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we might again see a subdued opening today as the Markets are expected to open on a flat to mildly quiet note and look for directions again. The Markets have given buoyant indicators after yesterday’s rise and after some consolidation again, the overall undercurrent still remains distinctly bullish.

For today, the levels of 6310 and 6345 are immediate resistance on the Daily Charts. The support exist at 6192, which is the 50-DMA at Close levels.

The RSI—Relative Strength Index on the Daily Chart is 56.2132 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD, though it still continues to trade below is signal line might attempt positive crossover in coming days. 

On the derivative front, the NIFTY January futures have added over 5.28 lakh shares or 3.10% in Open Interest. This is certainly positive as we can clearly interpret that the rise that we saw yesterday is not just on account of short covering. Fresh longs have been seen added across NIFTY and stock futures.

Overall, the Markets have attempted a breakout and after attempting support at its 50-DMA for couple of times in last fortnight. The Markets have managed to successfully hold on to that support and has attempted a reversal  with the yesterday’s up move. Even if the Markets consolidates at these levels, it is certainly likely to keep its head above the critical supports and prepare for further continuation of the up move in coming sessions.

The Markets will give reactions to WPI and CPI inflation data coming tomorrow, which is expected to be better and lower. Overall, given the structure on the Daily Charts, the Markets may again see brief consolidation with a positive bias. In even of some range bound movement, selective purchases may be continued to be made. Overall, positive outlook is advised for today.

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