Daily Market Trend Guide -- Wednesday, October 01, 2014

MARKET REPORT                                                                                         September 30, 2014

The Markets had an extremely volatile session as the Markets moved more than 100-odd points on either side before ended flat with nominal gains. The Markets opened on a quiet note and traded in capped range until the RBI Credit Policy was announced later. RBI, absolutely on expected lines, kept all key rates unchanged. Though the RBI Credit Policy remained a non-event, the Markets gathered strength after that. It saw a sharp upward move and went on to form the day’s high of 8030.90 by afternoon trade. However, severe volatility crept in as these levels were not sustained. The Markets saw near-vertical paring of gains. The Markets came off completely from its highs, dipped into negative and formed day’s low of 7923.85. Some recovery was seen after that and the Markets finally settled the day at 7964.80, posting a nominal gain of 5.90 points or 0.07% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, OCTOBER 01, 2014 

The analysis for the Markets remains more or less on similar lines. The Markets are expected to open on a quiet note and are likely to trade overall in a capped range. Volatility shall remain ingrained in the session. However, there are little chances of the Markets giving a run-away rise as tomorrow remains last trading day of the Week. The Markets shall remain closed on Thursday (Gandhi Jayanti), Friday (Dussera) and on Monday on account of Bakri ID. So, after Wednesday’s session, the Markets would only re-open on Tuesday.

The levels of 8010 and 8035 would act as resistance and the supports are expected to come in at 7898 and 78185 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.4132 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continue to remain bearish as it trades below its signal line. 

On the derivative front, NIFTY October futures have added over 1.97 lakh shares in Open Interest. This signifies that some fresh short positions are seen being created in the system.

Returning back to pattern analysis, the Markets have continued to remain in a broad trading range and therefore would continue to consolidate with upward bias so long as it maintains itself above its 50-DMA levels at Close. If the Markets breach these levels, it would invite some more weakness and would see itself entering a intermediate downtrend. However, until this happens, it would continue to consolidate with quite good amount of volatility in a broad range.

Overall, keeping this mind, the Markets would continue to see stock specific and sectoral out performance. Even if the Markets see some mild up moves, it is advised to continue to keep leverage under control and overall exposure limited. There are also chances that the Markets see some profit taking at higher levels, especially due to mini-vacation that is ahead. Overall, continuance of cautious outlook with selective but limited exposure is advised for the day. 

Milan Vaishnav,

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

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Tuesday, September 30, 2014

MARKET REPORT                                                                                         September 29, 2014

The Markets had an extremely lackluster session amid low volumes as the Markets spent the entire session in a very narrow range and ended the day flat with nominal losses. The Markets expectedly opened on a very quiet note and spent the morning session and major part of afternoon trade in a narrow and capped 30-odd points range. While trading in positive territory in the afternoon trade, the Markets inched up slightly further to post the day’s high of 7991.75. Soon these gains were pared as the Markets came off and further dipped into the negative. It went on to form the day’s low as well at 7934.70. However, the way Markets did not sustain higher levels, in the same way it did recover from its lows as well. It finally settled the day at 7958.30, posting a nominal loss of 9.95 points or 0.12% while forming slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 30, 2014 

Expect the Markets to once again open on a flat note. The Markets may trade flat and indecisive in the initial trade but is later expected to react to the RBI Credit Policy announcements that will come up later. Though nearly all market participants expect the rates to remain unchanged, any slightest of the surprise, on either side would have the Markets sharply react to that.

The levels of 8015 and 8050 would act as resistance while the levels of 7892 and 7818 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 47.9441 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD remains bearish as it trades below its signal line. 

On the derivative front, the NIFTY October futures have shed over 9.05 lakh shares or 5.52% in Open Interest. This is certainly not an encouraging reading as it demonstrates unwinding /reduction of long positions as the reduction in OI has come with the loss in NIFTY levels.

On the patterns, the Markets continue to follow the same pattern while the levels of 8180 acts as a immediate top for the Markets. The Markets would remain in sideways consolidation wherein we would see a range bound but quite volatile trade. This would remain until the Markets trades above its 50-DMA levels. Any breach below this 50-DMA levels would induce some further weakness in the Markets.

Overall, the Markets would also remain range bound and bit listless because of short trading week. Wednesday would remain the last trading day and a mini vacation follows after that. RBI Rate announcements would be closely watched and any surprise would be sharply reacted to. Apart from that, overall, with the Markets expected to remain in range amid low volumes, it is advised to refrain from creating over exposure in the Markets. Excess leverage should be avoided while maintaining caution during the day.

Milan Vaishnav,

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

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, September 29, 2014

MARKET REPORT                                                                           September 26, 2014

The Markets had a terribly volatile session on Friday wherein it succumbed to selling pressure in the first half of the session but recovered and ended the day with gains on back of S&P upgrading India’s sovereign rating to stable. The Markets opened on a mildly negative note and after initially trading in the negative surged to trade with modest gains. However, the Markets witnessed selling pressure returning after that and by mid afternoon trade had came off nearly 100-odd points from its initial intraday high to touch day’s low of 7841.80. However, it saw a sharp turnaround in reaction to  S&P’s rating upgrade and the Markets literally reversed all of its direction. It rose some 140+ odd points from its intraday low of 7841.80. It went on to post day’s high of 7993.30. It finally ended the day at 7968.85, posting a net gain of 57 points or 0.72% while still forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, SEPTEMBER 29, 2014

Expect the Markets to open on a flat to mildly positive note and continue with its up move. Over and above technical possibilities of the Markets continuing to pullback, it has held on to its support of 50-DMA at Close levels. The intraday trajectory of the Markets and close above the levels of 7885 would be important in order to avoid any further weakness from creeping in. However, volatility and some more corrective pressure at higher levels cannot be ruled out.

The levels of 8010 and 8040 would act as immediate resistance and the levels of 7885 and 7818 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 48.6387 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD still continues to trade bearish, below its signal line. On the Weekly Charts, the RSI is 66.2126 and it has just crossed below from a topping formation which is bearish. The Weekly MACD has reported a negative crossover and is now bearish as it trades below its signal line. 

On derivative front, the NIFTY October futures have added over 6.30 lakh shares or 4% in Open Interest. This shows that apart from sharp short covering from lower levels, some fresh addition of longs too have been reported.

Returning again to pattern analysis, the Markets have so far held on to two things. One, resisting at upper boundary line of the broadening formation and second, the levels of 50-DMA at Close on the downs side. In the coming week, the Markets will more or less remain in range and are not likely to give a runaway rise or any steep downfall as such as well. The overall activities would remain in a broad trading range with good amount of volatility ingrained in it.

Overall, reading the Weekly Chart as well, the Markets have formed an immediate top and so long as it maintains a Close above the levels of 7885, it would continue to remain in trading range.  However, with no structural breach on the Charts, shorts too should be avoided and on the other hand all profits should be protected at higher levels. While continuing to remain selective, cautious outlook 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

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com