Daily Market Trend Guide -- Tuesday, September 29, 2015

MARKET REPORT                                                                           September 29, 2015

We had expressed concerns about the Markets continuing to remain vulnerable from selling pressure at higher levels in our yesterday’s edition of Daily Market Trend Guide. Keeping in line with the analysis carried out the Markets succumbed to high degree of caution ahead of RBI Credit Policy review as it ended the day after coming from the day’s high. The Market saw a relatively better opening and traded stable in the first half of the day forming the day’s high of 7893.95. The Markets showed relative stability but it was the second half that did much of the undoing for the Markets. Caution weighed in on expected lines as after a range bound trade in the first half  the Markets saw rapid paring of gains in the second half of the session. The Markets went on to form the day’s low of 7787.95, coming off nearly 105-odd points from the high point of the day. No recovery was seen and the Markets finally settled the day at 7795.70, posting a net loss of 72.80 points or 0.93% after forming a similar top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 29, 2015

Markets are poised at a very critical juncture today. Global set up remains and we are likely to open on a gap down opening today again as well. However, the Markets are likely to see openings around the important pattern support at 7660-7675 zone and the behaviour of the Markets vis-à-vis this level would be extremely important to watch out for. There are chances that the Markets remain sideways in the morning trade and then react to the RBI Credit Policy review wherein the 0.25% cut remains discounted for.

For today, the levels of 7920 will continue to remain as resistance. The supports come in at 7720 and 7650-70 levels.

The RSI—Relative Strength Index on the Daily Chart is 42.8384 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have added over 2.30 lakh shares or 1.26% in Open Interest. This signifies creation of fresh shorts of modest quantities in the index futures. The NIFTY PCR stands at 0.90 as against 0.93.

Coming to pattern analysis, the Markets have failed to clear the 7960-8000 resistance zone. This was the support that it broke further following the breakaway gaps on the downside in the first week of September. Since then, the Markets have failed to clear these levels and continue to trade below that with uncertain bearish bias. Having said that, the Markets have a downside pattern support of 7650-7670 levels. Today’s imminent gap down opening is likely to see the Markets trade near those supports. After such imminent gap down opening, the Markets are expected to trade sideways until it reacts to RBI Credit Policy review. If the Markets breach this support zone of 7650-7670, it will get weaker in coming days but the intraday behaviour of the Markets vis-à-vis this level will be important to watch out for.

Overall, some chances of the Markets improving in the second half of the session cannot be completely ruled out for. But some amount of uncertainty will continue to persist. It is advised to refrain from shorts until the Markets breach its pattern support. While remaining completely light and moderate on positions, conservation of cash is advised for today.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91-98250-16331
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