Friday, August 1, 2014

Daily Market Trend Guide -- Friday, August 01, 2014

MARKET REPORT                                                                                    August 01, 2014
The Markets ended the July series on a bearish note as it opened negative but plunged later to end the day with good amount of losses. The Markets opened in negative territory on a quiet note and spent the entire first half of the session in sideways manner moving in a very narrow and capped 15-odd points range. In the second half, the weakness crept in to the Markets and intensified later as the Markets kept gradually making new lows. It went on to post the day’s low of 7711.15 towards the end of the session. It finally ended the day at 7721.30 after making a very modest recovery and posting a net loss of 70.10 points or 0.90% while forming a parallel bar on the Daily High Low Charts.
 
MARKET TREND FOR TODAY

The Markets have traded yesterday precisely in the manner analysed in our yesterday’s edition. We had mentioned that the Markets are witnessing Broadening Formation and this can have bearish implications in the immediate short term. Today as well, expect the Markets to open on a lower note and look for directions. Intraday trajectory would be crucial and the Markets may test its 50-DMA levels as well.

For today, the levels of 7790 would act as resistance and the levels of 7685 and 7570 would act as supports.

The RSI—Relative Strength Index on the Daily Charts is 55.5974 and it is neutral as it shows no bullish or bearish divergences. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY August futures have added 32.70 lakh shares or 32.88% in open interest. However, this figure stands little irrelevant yesterday as yesterday was a expiry day for the July series.

As mentioned yesterday, the Markets are witnessing a Broadening Formation on the Daily as well as Weekly Charts as well. This has bearish implications in the short term and there are chances that we may continue to see some correction continuing while witnessing intermittent pullbacks.

Overall, we continue to maintain our advisory on guarding profits at higher levels. Today, we might see lower opening but correction may remain range bound and see some intermittent pullbacks as well. Purchases should be made in very selective and limited manner. While maintaining more of liquidity, cautious outlook is advised for today.

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


Thursday, July 31, 2014

Daily Market Trend Guide -- Thursday, July 31, 2014

MARKET REPORT                                                                                              July 31, 2014
What seemed to be a session of one more correction turned out to be positive one for the Markets as it saw a rally in the second half of the session and ended the day with modest gains. The Markets opened a modestly negative note and it drifted in a sideways manner in the morning trade while trading with capped gains. It drifted lower by afternoon trade while it touched its day’s low of 7707.60. Just when it seemed the correction could widen, the Markets saw a sharp spurt from lower levels. It not only recovered all of its losses but also traded in  the positive territory. It went to form a day’s high of 7798.70. After hovering around those levels, it finally ended the day at 7791.40, posting a net gain of 42.70 points or 0.55% while forming a similar top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today is the expiry day of the current derivative series and expect the Markets to remain dominated with rollover activities. The Markets are expected to open on a flat and quiet note and look for directions. Due to expiry, some volatility may remain and the intraday trajectory would be important for the Markets to decide the trend. It may be noted that the Markets are witnessing a formation of a pattern called Broadening Formation.

Today, the levels of 7820 and 7860 would act as immediate resistance for the Markets. The supports would come in at 7680 and 7640 levels.

The RSI—Relative Strength Index on the Daily Chart is 61.9023 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY July futures have shed over 22.65 lakh shares or 18.97% in Open Interest whereas the August futures added 37.06 lakh shares or 59.39% in Open Interest.

Going by pattern analysis, as evident from the  Daily Charts, the Markets are witnessing formation of a pattern called “Broadening Formation”. This often exhibits a top which is higher than its preceding top and a bottom lower than its preceding bottom. This means that the Markets may continue to witness advances but may see no runaway rise and it has overall bearish implication in the immediate short term.

Overall, going by this reading, it is strongly advised to keep booking and protecting profits at higher levels. More attention should be paid to booking profits and fresh purchases should be kept very limited and stock specific. Overall, while maintaining more liquidity and less of exposure, cautious outlook is advised for today.

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


Monday, July 28, 2014

Daily Market Trend Guide -- Monday, July 28, 2014

MARKET REPORT                                                                                              July 28, 2014
After eight days of advance the Markets took a breather on Friday as it ended the day with modest losses. The Markets opened on a flat note and after trading in extremely narrow range near its previous close the Markets dipped into the red in the early minutes of the trade. The Markets continued to gradually decline and by afternoon trade went on to form the day’s low of 7748.60. However, the Markets attempted to stabilize in the second half of the session as it showed some recovery from its’ day’s low. It did manage to recover some of its losses but continued to trade in the negative territory. The Markets finally managed to end the day at 7790.45, posting a net loss of 40.15 points or 0.51% while forming a slightly higher top but sharply lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Though the Markets tested its fresh lifetime highs on Friday, it has not yet given a confirmed breakout and the levels of 7816-7840 continue to act as double top resistance. Today, expect the Markets to once again open on a quiet and flat note and look for directions. Until the Markets move past its previous top, it would continue to remain in consolidation stage and it is showing some possibility of weakness creeping in.

For today, the levels of 7816 and 7840 would act as immediate resistance for the Markets. The supports come in at 7700 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.2255 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 71.3815. It remains in “overbought” territory and also shows a Bearish Divergence as the Weekly NIFTY has posted a fresh 14-period high whereas RSI has not. The Weekly MACD continues to trade above its signal line.

On the derivative front, NIFTY July futures have shed over 16.01 lakh shares or 9.73% in Open Interest. Though there were some rollovers that were reported to have begun, some offloading was also seen in Friday’s session.

Going by the pattern analysis, the Markets have been seeing a Double Top resistance at 7816-7840 levels and have not given a breakout despite seeing fresh lifetime highs on Friday’s session. The Markets continues to trade below this level and it will have to move past its previous highs to confirm a breakout. However, given the overall structure of the Charts, read along with the lead indicators on the Daily and Weekly Charts, the run-away rise in the Markets is less likely even if its shows some positive trade.

Overall, it is advised to protect profits at higher levels and keep booking them with every rise. While further buying should be avoided, it should be restricted to extremely selective purchases while maintaining adequate liquidity. Overall, mild caution is advised in the Markets.

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