Friday, February 7, 2014

Daily Market Trend Guide -- Friday, February 07, 2014

MARKET REPORT                                                                                   February 07, 2014
The Markets had an extremely choppy session yesterday as it saw a very volatile trade on either side which finally resulted in the Markets ending with nominal gains. The Markets opened on a modestly positive note and formed its intraday high of 6048.35 in the early morning trade. However, after trading briefly in a capped range the Markets saw a very sudden and sharp fall. It dipped very sharply in the negative in a vertical fall and formed its intraday low of 5965.40. After forming this low in the late morning trade itself, the Markets formed a rising trajectory thereafter and recovered in the rest of the session.  The Markets gradually recovered all of its losses in the rest of the session and traded in the green towards the end. It finally managed to end the day at 6036.30 posting a nominal gain of 13.90 points or 0.23% while forming a higher top and similar bottom on the Daily Charts.


MARKET TREND FOR TODAY

The Markets have taken support for three times in last three session and have successfully managed to keep its head above the levels of 200-DMA at Close. Today, expect the Markets to open on a decently positive  note and continue with its up move. The global cues are supportive as the US Markets too have ended in the green after a pullback post falling below its 200-DMA. The intraday trajectory would continue remain important.

For today, the levels of 6075 and 6135 would act as immediate resistance on the Charts. The supports exists at 5977 and 5940 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.67 and it continues to remain neutral without showing any bullish or bearish divergence or failure swings. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, NIFTY February futures have shed 3.41 lakh shares or 2.08% in open interest. This shows some profit taking has been seen in the rise that we saw yesterday and the pullback may be because of short covering from lower levels. In either case, this signifies that a bottom has been attempted at the levels near the 200-DMA.It remains to be seen if we see fresh long positions getting built up after this. In any case, both FIIs and DIIs have remained net buyers in both derivative and cash segments yesterday.

Going by the pattern analysis, the Markets have attempted to find a bottom and reverse its trend. It is likely to continue with the advance today with a positive opening and might resist around its 100-DMA levels. It would consolidate around those levels again and only after that it can be confirmed that a trend reversal has happened if it moves beyond those critical resistance levels.

Overall, today, we are set to see a positive opening and the positive moves shall continue. The intraday trajectory would be important and the Markets will have to remain in rising trajectory in order to capitalize on the gains. Select buying can be done while protecting profits at higher levels. Overall, cautiously positive outlook is advised for today.

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



Thursday, February 6, 2014

Daily Market Trend Guide -- Thursday, February 06, 2014

MARKET REPORT                                                                                February 06, 2014
The Markets had a session similar to that of Tuesday as it opened lower  but recovered during the day to end the day in green and also it held on to the support of 200-DMA for the second time after testing it. The Markets opened on a modestly negative note on expected lines and soon slipped to the lowest level of the day while it formed its intraday low of 5962.05 in the early morning trade. The Markets spent some time until early afternoon trade trading in a very capped range in the negative territory. By afternoon, the Markets managed to recover from its lows to trade near its previous close. The second half of the session saw the markets crawling higher into the positive territory as it gave its intraday high of 6028.05. The Markets finally ended the day at 6022.40, posting  a net gain of 21.50 points or 0.36% while forming a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, expect the Markets to open on a flat to modestly positive note and look for directions. The Markets are expected to continue with its up move at least in the initial session. The Markets have held on to the support of 200-DMA at Close levels and are attempting a trend reversal. The intraday trajectory and the volumes would continue to play a critical role in this.

The levels of 6045 and 6080 would act as immediate resistance levels whereas the levels of 5976, the 200-DMA would continue to act as major support at Close levels. 

The RSI—Relative Strength Index on the daily chart is 34.53 and it is neutral without showing a failure swings or any bullish or bearish divergences. The Daily MACD still remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY February futures have added over 1.36 lakh shares or 0.84% in open interest. This signifies that exactly like day before, the rise in the Markets have seen some more fresh buying and not just short covering. This continues to remain a positive indicator. The NIFTY PCR stands at 1.11 as against 1.08.

Having said this, going by the pattern analysis, the Markets have held on to the support of 200DMA at Close levels. Any intraday dip below this level have seen recovery coming in. The Markets are attempting to reverse its trend. This attempt might see the Markets moving towards its 100-dma but it will require consistent higher top and higher bottom formations with volumes to successfully attempt a trend reversal.

All and all, we continue to advice to remain light on the positions and avoid aggressive positions. Any profits on either side should be protected and liquidity should be preserved. Very selective purchases may be made. Overall, very selective stock specific purpose with mild optimism is advised for today.

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



Wednesday, February 5, 2014

Daily Market Trend Guide -- Wednesday, February 05, 2014

MARKET REPORT                                                                              February 05, 2014
The Markets fared out exactly as analysed in our yesterday’s edition of Daily Market Trend Guide as it saw a gap down opening following global weakness and dipped below its 200-DMA intraday. However, this levels continued to hold as support as Close levels as the Markets recovered during the day to end the day above 200-DMA. The Markets opened on a gap down and soon formed its intraday low of 5933.30 in the early minutes of the trade. However, the Markets attempted to form a upward rising trajectory, though it continued to trade in a range until afternoon trade. It saw a sharper recovery coming in the second half of the session wherein the Markets recovered all of its losses. It even traded in the positive territory as it went on to form the day’s high of 6017.80 rising over 80-odd points from its day’s low. It finally ended the day flat at 6000.90, posting a net loss of just 0.90 points or 0.01% forming a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

 Today’s analysis continue to remain on the similar lines like yesterday. Today, we are expected to see a flat to mildly negative and quiet opening and the Markets are again likely to hover around its 200-DMA. It is likely that the Markets consolidate a bit and attempts to find bottom around this levels. The intraday trajectory and the behaviour vis-à-vis the levels of 200-DMA would continue to remain crucial.

Today, the levels of 6045 and 6080 would as immediate resistance on the Charts whereas the levels of 5975 and 5930 would act as support.

The RSI—Relative Strength Index on the Daily Chart is 31.6784 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergences. The Daily MACD continues to trade below its signal line. 

On the derivative front, the NIFTY February futures have added over 1.95 lakh shares or over 1.22% in open interest. This figure clearly shows that the rise of over 80-odd points that we saw yesterday from the lows of the day was just not merely on account of short covering. It has  seen some fresh buying as well which is clearly a positive indication.

Having said this, though the Markets are likely to see a subdued opening, the chances of it maintaining the levels above of 200-dma are very bright and the Markets are very likely to attempt a trend reversal from these levels. 

All and all, we continue to reiterate the analysis reading given yesterday. The Markets are attempting hard to find a bottom and reverse the trend. It is advised to continue / begin making fresh purchases on a very selective note while maintaining adequate liquidity and protecting profits at higher levels. Overall, positive outlook with a tinge of caution is advised for today.

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



Tuesday, February 4, 2014

Daily Market Trend Guide -- Tuesday, February 04, 2014

MARKET REPORT                                                   February 04, 2013
The Markets had an extremely bearish session yesterday wherein it spent the entire session in a downward falling trajectory and finally ended the day with a deep cut. The Markets opened on a negative note and immediately transformed itself into a falling trajectory and it remained like that for the entire session. The Markets kept sliding gradually and steadily and it went on to breach the 6000-mark as it formed its intraday low of 5994.45. Not even a feeble attempt of recovery during the entire session. The FII activity pattern of selling in cash segment and heavy shorting in the futures continued and the volumes remained lower than average across the board. The Markets finally ended the day at 6001.80, posting a net loss of 87.70 points or 1.44% while continuing to form a lower top and a sharply lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY
Today’s session would be a very crucial session for the Markets. Following global weakness, the Markets are set to open on a lower note. With the Markets slated to open with a modest gap down, the two important technical things would occur simultaneously. One, the Markets would get immediately “oversold”, and two, it would test its all important support of 200-DMA. This would rise to two clear possibilities, one, the Markets would show resilience to the global weakness, OR, two, we may see improvement as we go ahead in the session.

For today, the levels of 6040 and 6090 are immediate resistance levels and the supports exist at 5973 and 5945 levels at Close.

The RSI—Relative Strength Index on the Daily Chart is 31.7321 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergences. The Daily MACD continues to trade below its signal line.

On the derivative front, NIFTY February futures have shed over 1.72 lakh shares or just around 1.72% in Open Interest. This shows that some offloading has certainly been done, but the extent has remained limited and not brutal.

Having said all this, it is clear that the Markets will have a lower opening today and the levels of 200-DMA would get certainly tested. The only thing remains to be seen is the Markets would get immediate “oversold” and having tested 200-DMA while getting oversold will certainly create a favourable circumstance for the Markets to either show a strong resilience or show a sharp rebound sooner or later. So far as US Markets go, the Dow has declined over 1300 odd points from its all time high, has slipped below its 200-DMA and that too not stays “oversold”. The worst of the weakness in the US Markets seems to be nearly over.

All and all, given the above reading, it is advised to stay away from aggressive activities in the Markets. Shorting remains out of question at these levels but aggressive buying too should be avoided. It is advised to continue to make very select buying while preserving liquidity and positions as chances of improvement after a weaker opening just cannot be ruled out .

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

Monday, February 3, 2014

Daily Market Trend Guide -- Monday, February 03, 2014

MARKET REPORT                                                                                     February 03, 2014
The Markets had an consolidating session on Friday as it halted its 5-day losing streak and ended the day with modest gains, though it spent the entire session with low volumes in a 20-odd point range, heading nowhere. The Markets opened on a flat note and soon formed its intraday high of 6097.85 in morning session. Thereafter, after forming this day’s high, the Markets soon pared these gains in the early afternoon trade to trade flat. This phenomenon continued for the entire session as the Markets made a very modest recover until the end of the session to pare it again. It again recovered, while continuing to remain in a capped 20-odd points range and finally ended the day at 6089.50, posting a modest gain of 15.80 points or 0.26% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Expect the Markets to open on a modestly negative note again and look for directions. The consolidation in the Markets is likely to continue and the intraday trajectory that the Markets forms after opening would be crucial to decide the trend. The Markets will need up move with good volume participation to reverse its trend.

For today, the levels of 6100 and 6130 would act as immediate resistance on the Daily Charts. The levels of 6060 and 6035 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 37.4722 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD continues to remain bullish as it trades below its signal line. On the Weekly Charts, the RSI is 50.4384 and it has reached its lowest value in last 14-periods. The Weekly RSI has set a new low but NIFTY has not yet, and this is a minor bearish divergence on the Weekly Charts. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, NIFTY February futures have added over 2.72 lakh shares or 1.71% in Open Interest. This signifies that the Markets have not seen any selling in the consolidating session that it witnessed on Friday.

Going by overall pattern analysis, the Markets are ruling below its 100-dma levels. For the Markets to attempt to find a bottom successfully, the Markets will have to move past the levels of 100-dma and while doing so, it will have to do it with good participation and volumes. Until this happens, we are likely to see the Markets continue to see some pressure and continue to trend with a downward bias. However, while the Markets consolidate, we are likely to see the volumes continue to remain on the lower levels.

All and all, the Markets still have not found the bottom successfully, though on Friday, it has attempted to do so. The Markets are likely to continue to see pressured movements in a given range until it moves past it 100-dma. Until this happens, we would continue to see direction-less movement and range bound trades in the Markets. We continue to advice to refrain from taking aggressive long positions. Liquidity should be maintained and profits should be protected at any levels. Cautious optimism is advised for today.

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