Friday, March 7, 2014

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

MARKET REPORT                                                                                  March 07, 2014
Fuelled by massive FII buying which following narrowing of current account deficit, the Markets yesterday closed at its lifetime highs as it ended the session with a decent gain. The Markets opened on a positive note and traded decently positive but in sideward trajectory in the first half of the session. In this first half, the Markets sustained decent gains on good volumes but continued to resist at its double top resistance levels. The second half of the session saw the Markets gaining further strength as the Markets perked up higher and then until the end of the session kept making new intraday highs gradually. It went on to post the day’s high of 6406.60 towards the end of the session and finally ended the day at 6401.15, posting a robust gain of 72.50 points or 1.15% while forming a sharply higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today would be a very critical session for the Markets. The Markets are slated to open on a decently positive note and this opening will see the Markets going to their all time highs. However, this would also make the Markets very near to the overbought territory and there are fair amount of chances that we encounter consolidation again at higher levels. The intraday trajectory would continue to occupy the centre stage along with volumes.

For today, the Markets will see it trading at its life time highs once it moves past 6415 levels. The supports exists at 6350 and 6310 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 68.9202 and it has reached its highest value in last 14-days which is bullish. The Daily MACD remains bullish as it continues to trade above its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.

On the derivative front, NIFTY March futures has went on to add over 4.35 lakh shares or 2.83%  in Open Interest. This indicates continuation of fresh buying and creation of fresh longs in yesterday’s session. The NIFTY PCR stands at 1.14 as against 1.03 yesterday.

Going by the pattern analysis, the Markets have moved past its minor double top resistance which was 6350 levels and moved towards the all time intraday high of 6415. Today’s opening would see it trading above the all time high which technical should act as either resistance (in case of lower opening) or support if the Markets opens above that. This makes a ground for the Markets to open higher and consolidate from higher levels again.

All and all, with the positive opening likely, the Markets would see itself trading at its all time highs. Given this, there are fair chances that we see consolidation returning. There are chances that the Markets see some mild profit taking from higher levels as today’s up move would take the Markets very near to its overbought territory. It is advised to very  vigilantly guard profits at higher levels and not to resort to blind buying. Baring some consolidation which is expected at higher levels, the under current continues to remain very much intact. Cautiously positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331 



Thursday, March 6, 2014

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

MARKET REPORT                                                                                      March 06, 2014
In what seemed to be a corrective session in the first half, turned out to be a positive one as the Markets reversed in the second half of the session to continue to end yet another day with decent gains. The Markets opened on a positive note but soon after positive opening, transformed itself into a falling channel. It pared all of its gains until later morning trade as it dipped briefly into negative territory while forming day’s low of 6287.80. It spent the session trading a very capped range for some time but the second half of the session saw the Markets giving a robust turn around. The Markets saw a very sharp up move as it reversed its trade a rose quite sharply and went on to give the day’s high of 6336.25. It hovered around those levels for a while and finally ended the day at 6328.65, posting a net gain of 30.70 points or 0.49% while forming a sharply higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to see yet another positive opening and continue with its up move at least in the initial session. However, as evident from the Chart, the opening is likely around its pattern resistance in form of double top. The intraday trajectory that the Markets form after opening would be critically important and the  behaviour of the Markets vis-à-vis the double top resistance would be equally important.

For today, the levels of 6355 and 6390 would act as immediate resistance levels. The supports exist at 6275 and 6250 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.6038 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 trades above its signal line and it continues to remain bullish. 

On the derivative front, NIFTY March futures have added over 8.34 lakh shares or 5.74% in Open Interest. This shows that the more longs have been yesterday, especially in the second half of the session.

Going by the pattern analysis, as mentioned earlier, the Markets might open near its double top resistance levels and see some consolidation there. If the Markets resists near those levels, then the resistance can come in form of either range bound consolidation or mild profit taking. In any case, the Markets would keep its underlying trend intact.

All and all, the Markets would open on a positive note and at the same time, might consolidate at higher levels as well. Going by this, it is advised to continue to protect profits at higher levels. With the underlying trend remaining intact, shorts should strictly be avoided. Any downside or consolidation period should be utilized in making fresh purchases. With some chances of mild correction / consolidation expected at higher levels, cautious approach is advised for today.

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


Wednesday, March 5, 2014

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

MARKET REPORT                                                                                          March 05, 2014
The Markets reversed all of its losses and more in yesterday’s session as the easing of geo political tensions between Ukraine and Russia added impetus to the consolidating markets as it ended the day with robust gains. The Markets did open on a positive note but the opening remained quiet as the Markets traded in a capped range with limited gains in the morning trade while it formed its day’s low of 6215.70. However, the Markets gained some strength in the late morning trade on news of easing of tensions and this strength fortifies in the late afternoon trade. The Markets kept steadily making new intraday highs. It went on to form the day’s high of 6302.15 in the last hour of the trade. It finally ended the day at 6297.95, posting a robust gain of 76.50 points or 1.23% while forming a higher top and similar bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The Markets yesterday have paned out exactly as analysed in our yesterday’s edition of Daily Market Trend Guide. Today as well, expect the Markets to open on a modestly positive note and continue with its up move at least in the initial trade. Primary speaking, the Markets are expected to inch upwards moving towards the levels of 6355 wherein it would encounter a minor Double Top formation.

For today, the levels of 6330 and 6365 would act as immediate resistance for the Markets. The supports would exist at 6255 and 6210 levels.

The RSI—Relative Strength Index on the Daily Chart is 62.5592 and it does not show any failure swings. The Markets have posted its 14-day high but RSI has not yet and this is bearish divergence. The Daily MACD is bullish as it continues to trade above its signal line. On Candles, an engulfing bullish line has occurred. If this pattern occurs during an uptrend, which is the case with NIFTY, it indicates a potential top.

On the derivative front, the NIFTY March futures have added over 10.84 lakhs shares or massive 8.08% in Open Interest.   This robustly suggests that good amount of fresh longs have been created and yesterday’s gains are not just merely on account of short covering.

This time we will have to read lead indicators along with F&O data as well as pattern analysis of the Charts. Going by pattern analysis, the Markets should have no problems going around 6350-6360 levels wherein it is again likely to consolidate. However lead indicators mildly suggest that the Markets may struggle to reach there and pre-pone the consolidation or may see some minor profit taking. Again the F&O data that shows big addition of Open Interest shows that it will resist to any immediate downside in the Markets.

Going by all this, one thing is clear that even if the Markets struggles a bit to move upwards, it is not likely to show any significant downside from there as well. At the most, it may again consolidate a bit around these levels and upwards. Given this reading, it is advised that given a brief likelihood of profit taking from higher levels, the existing profits should be very vigilantly protected now. Also, keeping other indicators in view, shorts should still be strictly avoided. Overall, continuance of positive outlook is advised for today.

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


Tuesday, March 4, 2014

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

MARKET REPORT                                                                                         March 04, 2014
The Markets snapped its five-day gaining streak as yesterday’ session remained corrective in nature on expected lines as the Markets ended with losses. The Markets opened on a modestly negative and quiet note traded in a narrow range with capped losses. The Markets formed its intraday high of 6277.75 in the early minutes of the trade. The entire morning session was spent by the Markets while trading in a sideward trajectory. However, the second half of the session saw some more weakness creeping in as the Markets lost ground gradually and steadily. Towards the end, it went on to form the day’s low of 6212.25. The Markets saw a very minor recovery from the lows of the day and finally closed at 3221.45, posting a net loss of 55.50 points or 0.88% while forming a slightly lower top and lower  bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, the Markets are likely to open on a modestly positive note and would look for directions. The weakness that we saw yesterday would now see itself getting replaced with some mild recovery in the Markets. While intraday trajectory would continue to remain important, we are likely to see some respite from the weakness that we saw yesterday. The Markets might trade in a range today with the levels of 100 and 50-DMA acting as major supports.

For today, the levels of 6280 and 6335 are immediate resistance on the Daily Charts. The supports exist at 6185 and 6170 levels at Close.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.7830 and it is neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to remain bullish as it trades above it signal line. 

On the derivative front, the NIFTY March futures saw shedding of Open Interest by over 2.52 lakh shares or 1.84%. This signifies some profit taking from higher levels in the second half of the session.

Going by the pattern analysis, the Markets have just corrected after five days of gains. Though it corrected yesterday, it has shown no structural breach on the Charts and it still continues to trade above all of its Daily Moving Averages. Having said this, in event of any weakness, it would be important for the Markets to keep trading above its 50-DMA and 100-DMA at Close levels and these two levels should continue to act as supports. So long as the Markets continue to trade above these levels, any weakness would be just consolidation before continuation of the up move.

All and all, today, we would see a modest opening and the Markets should see minor gains in the opening trade. With no structural breach on the Daily Charts, the shorts should be strictly avoided. Any downside should be utilized in making selective purchases. Overall, though the quantum of the exposure in the Markets should  be controlled,  cautiously positive outlook is advised for today.

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