Thursday, October 9, 2014

Daily Market Trend Guide -- Friday, October 10, 2014

MARKET REPORT                                                                                   October 09, 2014
Breaking a losing streak of three days, the Markets staged a very smart pullback today and ended the day with decent gains. The Markets saw a better than expected opening and after opening on a positive and stronger note the Markets effortlessly maintained those opening gains in the first half of the session. Markets saw some further strength coming in the second half of the session as it perked up further and went on to form the day’s high of 7972.35. No significant pressure of any kind was seen even at higher levels as the Markets spent the final hour of the trade in sideways movement. It finally settled the day at 7960.55, posting a very decent gain of 117.85 points or 1.50% while forming a higher top and higher bottom on the Daily Bar Charts, though the volumes remained little lower for the day.

MARKET TREND FOR FRIDAY, OCTOBER 10, 2014

Since the Markets have ended near the high point of the day, we can expect the Markets to give a positive opening in the initial trade. However, in order to capitalize on the gains the Markets will have to surge ahead with good participation, i.e. volumes. The absence of enough participation would be a tool enough to keep the Markets in the broad trading range. Therefore, intraday trajectory, along with volumes would be critical to decide the trend for the immediate short term.

The levels of 7995 and 8055 would act as immediate resistance for the Markets. The support would come in lower at 7912 and 7820 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.8354 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY October futures have added nominal 96850 shares or 0.59% in Open Interest. The another way to interpret this figure would be to say that since there has been no reduction in Open Interest, the rise that was seen was not due to short covering and this increases the chances for the rise to percolate to the next day.

Examining the pattern on the Daily Charts, Markets are continuing to trade in broad 150+ points of trading range. On the lower side, the Markets have taken support at the 50-DMA levels and its filters and the trend support at 7815 levels. So long as Markets trades above these levels, broad consolidation would continue but some amount of volatility would continue to remain ingrained in the trade.

Overall, with Infosys coming out with numbers tomorrow, the IT pack would continue to witness volatile movement and Markets too, to some extent would react to this. Apart from this stock specific purchases and action would continue but as mentioned earlier volumes will have to be higher in order to have a sustainable and longer pullback. Overall, continuance of caution with very selective purchases 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
+91-98250-16331

Wednesday, October 8, 2014

Daily Market Trend Guide -- Thursday, October 09, 2014

MARKET REPORT                                                                                              October 08, 2014
Markets spent yet another session in a very capped and narrow range and ended the day with nominal losses while IT and Pharma shares took serious beating, especially IT shares after downgrade of Infosys. The Markets opened on absolutely flat note and after momentarily dipping into the red crawled back in the positive territory. It saw some selling pressure coming in which sent the Markets back in the negative territory. The Markets remained overall range bound but equally volatile while it tested its pattern support while forming day’s low of 7815.75. In the last hour of the trade, the Markets saw a sharp recovery from lower levels. It not only dragged itself in to the positive territory again but formed the day’s high of 7869.90. This recovery was pared again as the Markets came off and finally ended the day at 7842.70, posting a nominal loss of 9.70 points or 0.12% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, OCTOBER 09, 2014

The Markets tested its pattern support levels of 7818 while it made its low of 7815.75 but has closed above that. The Markets are likely to open on a modestly positive note and trade positive in the initial trade. Though intraday trajectory would remain grossly important to decide the trend for the session, it would be critically important for the Markets to maintain levels above of 7815-7818 mark.

The levels of 7870 and 7920 would act as resistance. The supports are expected to come in at 7815-7818 and 7760 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.8405 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence as such. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY October futures have added 50,500 shares or nominal 0.31% in Open Interest. This signifies that though the Markets remained range bound and volatile, there was no unwinding of open positions seen.

Returning to pattern analysis, as mentioned in our previous edition, the Markets continue to remain in a broad formation. They have closed below the 50-DMA but are still within in filters and also trade above its neckline support. It would be critically important for the Markets to remain and trade above 7815-7818 levels. Any breach below these levels would induce further weakness in the Markets.

Overall, the advisory remains on similar lines that of yesterday. Though the Markets have not breached any serious support levels it is also not likely to see any runaway rise as well and the action would remain stock specific and limited with some sectoral out performance. Keeping this in view, selective purchases may be made but with continued caution and while avoiding any excess leverage. Continuance of positive caution 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
+91-98250-16331


Daily Market Trend Guide -- Wednesday, October 08, 2014

MARKET REPORT                                                                               October 07, 2014
Weak technicals and adjustment to global spikes during the holidays took its toll on the Markets as the Markets ended the day with somewhat decent correction. The Markets opened on a mildly negative note and remained negative throughout the session. It formed its intraday high of 7943.05 and mildly drifted further into the red. The Markets continued to trade with capped losses until afternoon trade. With no evident attempt of recovery seen, the Markets saw increased pressure in the second half of the session. It went on to drift further and went on to form the day’s low of 7842.70 slipping below its 50-DMA levels. Not much recovery was seen from these levels as well as the Markets finally settled and ended the day at 7852.40, posting a net loss of 93.15 points or 1.17% while forming a sharply lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, OCTOBER 08, 2014

The Markets have ended below its 50-DMA levels but have stayed within the filters. Today, expect the Markets to open on a modestly negative note and trade negative in the initial trade and it is expected to test the support at the support line shown on the Charts. There are chances that the Markets attempts to see a technical pullback. However, any slippage below 7815 levels would cause further intermediate short term weakness in the Markets.

The levels of 7943 and 7990 would act as immediate resistance and supports are expected to come in at 7815 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 40.4565 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence as such. The Daily MACD remains bearish while trading below its signal line.
On the Derivative front, NIFTY October futures have added over 6.31 lakh shares or 4.04% in Open Interest. This shows significant addition of short positions in the system.

Taking cue from pattern analysis, the Markets tested its 50-DMA levels and ended below it but has remained within its filters. If the Markets reverts and closing above it again, it would prove a whipsaw and the Markets would return again to consolidation / trading range. However, any slippage below 7815 levels would induce further immediate short term weakness in the Markets.

Overall, there are fair amount of the Markets attempting a pullback and returning back within the consolidation / trading range. However, until this happens, exercising caution would be imperative and excessive leverage should be avoided. Overall exposure should be kept limited and under control. While continuing with stock specific outlook, positive caution 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
+91-98250-16331

Tuesday, October 7, 2014

Daily Market Trend Guide -- Tuesday, October 07, 2014

MARKET REPORT                                                                                     October 01, 2014
The Markets ended with nominal losses on Wednesday, 1st of October ahead of mini vacation that followed while trading on very cautious note and low volumes. The Markets saw a expected quiet opening and while opening on a modestly positive note, it formed its day’s high of 7977.50 in the early minutes of the morning trade. Thereafter, the Markets drifted in the negative territory and while doing so, it overall traded in a much capped range and on very low volumes. While drifting in the red, the Markets went on to form the day’s low of 7936.70 in the mid afternoon trade. What followed thereafter was a very mild form of recovery. The Markets attempted to recover from its intraday lows to trade again on a flat note without making any decisive moves. As mentioned, the Markets traded on low volumes and it finally drifted bit lower to end the day at 7945.55, posting a minor loss of 19.25 points or 0.24% while forming a lower top but slightly higher bottom on the Daily High Low Charts.


MARKET TREND FOR TUESDAY, OCTOBER 07, 2014 

Markets will see some shaky start as it would open today after a slumber of 5 days (3 holidays and a weekend) and while doing so, it would try and adjust to some volatility that the Global Markets saw in these days. With some mildly positive opening expected, the Markets are overall likely to remain in a trading range with some amount of positive bias until it maintains levels above its 50-DMA.

The levels of 8030 and 8075 would act as resistance and the levels of 7805 and 7818 would continue to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 46.9273 and it remain neutral as it shows no bullish or bearish divergences or any failure swing. The Daily MACD remains bearish as it trades below its signal line.  On the Weekly Chart, the RSI is 65.2130 and it remains neutral as well with no bullish or bearish divergence or failure swing. The Weekly MACD is bearish as it trades below its signal line. 

On the derivative front, the NIFTY October futures have shed 62,000 shares or nominal 0.40% in Open Interest. This signifies that there has been no major offloading that was seen on 1st October (previous) session.

Returning to pattern analysis, the Markets continue to remain in “reverse triangle” formation, also known as “Broadening Formation”, more distinctly now on Weekly Charts. On the Daily Chart, this is lost significance as the Markets have continued to trade in broad range, though distinctly failing to break out on the upside. So long as the Markets continue to maintain levels above of 50-DMA at Close, it would continue to remain in a trading range with mild tinge of positive bias.

Overall, while the Markets adjust to global markets after 5-days of holidays, we would see some amount of volatility ingrained in it. The Markets are likely open and remain positive in the initial trade and some technical pullback in oversold stocks and some buying in select stock specific stocks may be seen. While continuing to maintain a moderate exposure, cautiously positive outlook 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
+91-98250-16331