Friday, September 26, 2014

Daily Market Trend Guide -- Friday, September 26, 2014

MARKET REPORT                                                                            September 25, 2014
The Markets took a beating yesterday as it registered a significant decline on a very high volume on the expiry day of September series as it ended the day with a deep cut. Coal verdict and resultant negative sentiments were to blame but technicals too remained much weaker as well. The Markets opened on a flat note and formed its intraday high of 8019.30 in the early minutes of the trade. Thereafter, for the rest of the session, the Markets remained in falling channel and in falling trajectory. In the morning trade itself, it slipped in the red and kept losing ground consistently. It kept making lower lows intraday and continued to see selling pressure throughout the session. This pressure intensified in the late afternoon trade as the Markets nearly touched its 50-DMA while it formed the day’s low of 7877.35, slipping nearly 140-points off its intraday high. Minor attempt to recover was made in last minutes of the trade but the Markets finally settled at 7911.85, posting a net loss of 90.55 points or 1.13% while forming a lower top and sharply lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, SEPTEMBER 26, 2014

Technically speaking, the weakness in the Markets is likely to persist, at least in the initial trade. Expect the Markets to open on a lower note and look for directions. The Markets are expected to test its 50-DMA of 7876 and the behaviour of the Markets vis-à-vis this level would be crucially important. Any breach below this would put the Markets in intermediate downtrend. Markets will have to trade above this level to see a pullback, even if it is merely a technical pullback.

The levels of 7950, 7975 would act as immediate resistance while the levels of 7876 and 7810 would act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 44.3611 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Daily MACD continues to remain bearish while trading below its signal line. 

On the derivative front, the October Series has seen NIFTY Futures adding over 34.28 lakh shares or 27.76% in Open Interest. However, this being also due to rollovers, the singular reading of this data may not be of much significance. However, with the overall premium in the NIFTY Futures declining, we have grounds to presume that some creation of short positions too have taken place.

Returning to pattern analysis, in our previous editions of Daily Market Trend Guide, we have been mentioning the Broadening Formation on the Daily Charts. This formation has kept its significance as the Markets have now confirmed the levels of 8180 as its immediate top. Now, it would be necessary for the Markets to either consolidate or correct and form a different area pattern before it attempts to move up again. The sustenance of the Markets above its 50-DMA would be crucial in order to avoid entering into intermediate downtrend.

Given this reading, the Markets are set for a lower opening but there are mild chances that the Markets may put up some resilience post opening while attempting to take support near 50-DMA. Bargain hunting may be done, but only in select stocks while still keeping overall leverage under control and maintaining adequate liquidity. Apart from mild bargain hunting, purchases should be avoided while maintaining heavy caution in the Markets.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in
+91-98250-16331


Thursday, September 25, 2014

Daily Market Trend Guide -- Thursday, September 25, 2014



MARKET REPORT                                                                                     September 24, 2014

The Markets had a consolidating session once again as it spent the entire day in a tight and narrow range and ended the day with nominal losses. The Markets opened on a quiet note and traded briefly in the positive territory while it formed its day’s high of 8042.05 in the early minutes of the day. However, the Markets soon drifted in the red thereafter and then spent most part of the session in the negative territory. A mild attempt was seen in the late morning trade wherein the Markets recovered its losses to trade briefly in the green but slipped again to form the day’s low of 7950.05 in the late afternoon trade. The Markets hovered in a narrow range of 30-odd points throughout the day and finally managed to end the day at 8002.40, posting a net loss of 15.15 points or 0.19% while continuing to form a lower top and lower bottom on the Daily Bar Charts.



MARKET TREND FOR THURSDAY, SEPTEMBER 25, 2014


Today, expect the Markets to open mildly on a positive note and trade positive initially. Also, today is the expiry day of the current derivative series and therefore the session would remain undoubtedly remain dominated with rollover centric activities. The volatility is likely to stay and the Markets are likely to remain in a broad trading range with no signs of upward breakout on a significant basis.


The levels of 8040 and 8080 would act as resistance. The supports would come in at 7950 and 7870 levels.


The RSI—Relative Strength Index on the Daily Chart is 50.7808 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD remains bearish as it trades below its signal line. 


On the derivative front, rollovers continued as NIFTY September futures shed over 20.39 lakh shares or 20.16% in Open Interest whereas the October series added over 25.36 lakh shares or 25.84% in Open Interest. The NIFTY PCR stands at 0.87 as against 0.89 a day before.


Taking a look at the pattern analysis, as evident from the Charts, the Markets have chose to remain within a broadening formation which began to develop from the Month of June. Though such pattern has a very less frequent occurrence, the Markets still remain within this broad formation while failing to breach the upper boundary line twice. Though the third wave in this formation is  bit extended, it still remains within this formation.


Overall, the Markets might see some technical pullback and trade positive initially but overall bias still remains on the possibilities of consolidation continuing. Even with the under current remaining intact, the Markets may witness selective sell offs and would attract buying in selective quality non-index stocks as  stock specific sectoral out performance is likely. Overall, controlled leverage with very selective exposure is advised.


Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in


+91-98250-16331




Tuesday, September 23, 2014

Daily Market Trend Guide -- Wednesday, September 24, 2014



MARKET REPORT                                                                             September 23, 2014

Though we can blame anything from weak economic signals from Euro zone and possible rise in unemployment in China or rising  geopolitical risks, actually weak technials played its part today in the Markets, much on expected lines as the Markets ended the day with a deep cut. After opening on a quiet note, the Markets showed some short lived upward momentum while it  formed its day’s high of 8159.75. However, after staying briefly in to the green, the Markets slipped into the negative territory. It continued to trade with capped losses in the first half of the session. The second half saw more weakness coming in as the Markets started to pare grounds rapidly. Showing no signs of recovery from lower levels, the Markets went on to form the day’s low of 8008.10, coming off nearly 150-odd points from day’s high. It finally ended the day at 8017.55, posting a deep cut of 128.75 points or 1.58% while forming a lower top and sharper lower bottom on the Daily Bar Charts.



MARKET TREND FOR WEDNESDAY, SEPTEMBER 24, 2014 


Technically speaking, the Markets have reaffirmed that the levels of 8180 would stay as immediate top for the time being. With the Markets closing near the low end of the day, we can expect a subdued opening tomorrow. The Markets may open quiet or mildly negative and might continue to drift, at least in the initial trade. Any pullback, if at all it sees, is all likely to remain short lived.


The levels of 8100 and 8160 would act as resistance and the supports would come in at 7940 and 7910 levels.


The RSI—Relative Strength Index on the Daily Chart is 51.6951 and it remains neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD remains bearish as it trades below its signal line. On the Candles, a big black candle has occurred signifying the credibility of the resistance.


On the derivative front, both rollovers and unwinding of positions continued. The NIFTY September futures shed over 9.73 lakh shares whereas October series added over 28.32 lakh shares or 40.58% in Open Interest.


The pattern analysis of the  Daily Chart clearly shows the significance of the resistance that the broadening formation has posed before the Markets. The Markets tried to break out of the upper rising boundary line and failed to do so. Further, it gave up and came off quite a bit with heavy volumes and thus re-validating the resistance.


Overall, the bias of the Markets will now remain on the downside. Any pullbacks would be technical pullbacks and fresh breakout would occur only above 8180 levels. Any up swings, until this happens would remain quite volatile and with all likelihood will get sold into. Therefore, any fresh positions should be taken selectively in non-index components and quality stocks. While keeping overall leverage in control, caution is continued to be advised.


Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA
+91-98250-16331

Brief Market Forecast for Tuesday, September 23, 2014

Sunday, September 21, 2014

Daily Market Trend Guide -- Monday, September 22, 2014

MARKET REPORT                                                                          September 21, 2014
The Markets chose to remain in consolidation stage once again instead of breaking out as it traded in a capped range and ended the day with very nominal gains. The Markets opened on a mildly positive note and after dipping momentarily in the red, it pulled back in the morning trade to form the day’s high of 8160.90. However, the early afternoon trade soon saw paring of all those gains. Markets came off its intraday high by paring all of its gains. It dipped little bit into negative again while forming the day’s low of 8105.35. Thereafter, the  Markets spent rest of the entire session in a very narrow and capped range. It neither saw any sharp pullback nor did it saw any further weakness creeping in. After trading in a narrow range in this fashion, it finally ended the day at 8121.45, posting a net gain of 6.70 points or 008% while forming a mildly higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, SEPTEMBER 22, 2014

Just like Friday, the Markets continue to remain in little precarious position. Unless the Markets breach out of the rising trend line and move past its previous top, both of these would continue to act as immediate resistance. Expect the Market to open once again on a quiet note. The intraday trajectory and the behaviour of the Markets vis-à-vis the levels of 8130-8150 levels would remain very crucial.

The levels of 8140 and 8180 would act as resistance and the levels of 7940 and 7910 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 61.2146 and it remains neutral without showing any bullish or bearish divergence or any failure swings. The Daily MACD is bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI stands at 73.0196 and it trades in “overbought” territory. Further, though it does not show any failure swing, the NIFTY has formed a fresh Weekly high but Weekly RSI has not yet. This indicates Bearish Divergence. The Weekly MACD continues to trade above its signal line.

On the derivative front, some rollovers seem to have begun. The NIFTY September futures have shed over 8.41 lakh shares or 6.19% in Open Interest. The October series have added 6.58 lakh shares in Open Interest.

Referring to pattern analysis again, the Markets have not broken out comprehensively from the rising trend line. Further, it should be noted that the referred line is “rising” and therefore, each day pauses a higher figure for the Markets to post a break out. Until this happens, this line as well as the previous high would continue to act as resistance and there are chances that the Markets continue to remain in consolidation stage and might see minor profit taking as well.

Going by all this, we reiterate defensive approach in the Markets. Fresh purchases may be made as  stock specific activities would be seen. Sectoral out performance would also be seen but at the same time profits should be protected at higher levels. While keeping overall leverage under control, cautious outlook should be maintained.

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