Thursday, January 29, 2015

Daily Market Trend Guide -- Friday, January 30, 2015

MARKET REPORT                                                                                        January 30, 2015
The Markets had a session typically affected by rollovers though it continued to demonstrate strength as it consolidated at Close levels to end the day with modest  gains. The Markets saw a negative opening formed its intraday low of 8861.25 in the morning trade. The overall trading range of the Markets remained wider as post such negative opening, the Markets spent rest of the session recovering from morning lows. The remaining session remained quite range bound but the final hour of the trade saw sharp up move in the Markets. The Markets not only shot up in the final hour of the trade but went on to form the intraday high of 8966.65. It finally settled the day at 8952.35, posting a modest gain of 38.05 points or 0.43% while forming a slightly lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, JANUARY 30, 2015

Though the Markets have shown consolidation at Close levels and have declined at all, still the analysis would continue to run on similar lines as that of yesterday. The Markets would see a quiet opening and the levels of 8985 would continue to act as immediate top. The Markets are trading “overbought” and this forces us to exercise caution even if the Markets continue to demonstrate liquidity driven strength.

The levels of 8985 would remain immediate resistance for the Markets. The supports would exist much lower at 8850 and 8775 levels.

The RSI—Relative Strength Index on the Daily Chart is 76.8426 and it has formed the fresh 14-day high with is bullish. However, it continues to trade in “overbought” zone. It does not show any bullish or bearish divergence. The Daily MACD remains bullish while trading above its signal line.

On the derivative front, the NIFTY saw in-line rollovers as compared to its 3-month average and so did the stock futures. NIFTY has continued to see net addition in Open Interest. However the overall Open Interest in the Derivative segment has crossed the Rs. 1 Trillion mark which certainly should prevent the market participants from throwing caution into the air.

Returning to pattern analysis, the Markets have continued to resist to the upper rising trend line and the levels of 8985 formed would continue to act as immediate top for the Markets. For any fresh up move to occur, the Markets will have to move past this level and while it does so, it will need good amount of conviction and volumes. IMPORTANTLY, if the Markets moves past this level while remaining “overbought”, the sustainability of such up move would be a matter of concern.

Overall, as mentioned, under the present technical structure of the Markets, any consolidation or minor correction, which looks imminent, would be very healthy for the Markets. It would lend sustainability and strength to the present up move that the Markets have seen. Under present circumstances, we continue to reiterate the view of vigilant protection of profits at higher levels. Fresh purchases should be restricted and made on selective basis.

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, January 28, 2015

Daily Market Trend Guide -- Thursday, January 29, 2015

MARKET REPORT                                                                                  January 29, 2015
The Markets remained utterly volatile on Wednesday as it resisted precisely at the upper rising trend line and ended the day flat after wild swings. The Markets saw a quiet opening on expected lines and traded into negative in the morning trade, though with capped losses. However, later in the day, the Markets saw a sharp up move while it gathered strength. It went on to post a fresh lifetime high of 8985.05 in the mid session. However, at this time,  selling pressure and profit taking at higher levels weighed in as mentioned in our previous edition of Daily Market Trend Guide. This saw the Markets paring all of its gains in the second half of the session. It further went on to dip into negative to form the day’s low of 8874.05, losing over 100-odd points from the high point of the day. It finally settled the day flat at 8914.30, posting a negligible gain of 3.80 points or 0.04% while continuing to form a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, JANUARY 29, 2015

We can expect the Markets to see a stable and quiet opening but at the same time, it becomes very important to note that though the Markets have demonstrated good amount of strength by a flat close, it has potentially formed a immediate top for itself at 8985 levels. Even if the undercurrent which remains certainly intact, some amount of ranged consolidation coupled with mild profit taking cannot be ruled out. Further, we enter the expiry day of the current derivative series and therefore the session would continue to remain dominated with rollovers.

The levels of 8985 would now act as immediate resistance and the supports would come in at 8820 and 8750 levels on the lower side.

The RSI—Relative Strength Index on the Daily Chart is 75.7446 and it has reached its highest value in last 14-days which is bullish. However, it now clearly trades in “overbought” zone and shows no bullish or bearish divergence. The Daily MACD remains bullish trading above its signal line.

On the derivative front, rollovers continued as NIFTY February series added over 84.04 lakh shares or 69.91% in Open Interest.

Taking a cue from pattern analysis, as mentioned in our yesterday’s edition of Daily Market Trend Guide, the Markets have now resisted precisely at the upper rising trend line as evident on the Daily Charts. Having said this, even if the sentiment remains buoyant, some amount of consolidation or mild profit taking from higher levels continue to remain imminent. Also, the levels of 8985 would now act as immediate top for the Markets.

Overall, given the technical structure of the Charts, with the Markets resisting precisely at the upper rising trend line and further coupled with the fact that it trades “overbought”, it is very likely to see retracements with each up move. Though there may not be any significant correction, but this range bound consolidation will certainly have high degree of volatility ingrained in it. Under such scenario, we continue to reiterate very vigilant protection of profits at higher levels.

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

Tuesday, January 27, 2015

Daily Market Trend Guide -- Wednesday, January 28, 2015

MARKET REPORT                                                                                   January 28, 2015
The Markets continued to post fresh lifetime highs and ended the day with gains for fifth day in a row while remaining in “overbought” zone. The Markets saw a flat opening but posted some modest gains in the morning trade. Markets pared these gains as it came off and dipped very modestly into the red for a very brief period while forming the day’s low of 8825.45 in the late morning trade. Until afternoon the Markets saw a very narrow and capped movement as it spent the first half of the session in sideways trajectory.  The second half of the session saw a sharp rise in the Markets. It saw almost parabolic upside as liquidity continued to chase the Markets. It went on to form the fresh lifetime high of 8925.05 in the later part of the session. These gains were maintained and the Markets finally ended the day at 8910.50, posting a decent gain of 74.90 points or 0.85% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, JANUARY 28, 2015

The Markets have continued to demonstrate high liquidity driven chase and we can expect this buoyant trend to continue. However, with the existing structure of the Chart, we cannot rule out modestly negative to flat opening to the session. Even if we get a positive opening, some amount of consolidation has become imminent in the Markets. With each higher level, it enforces more caution into the air. Further, while we enter into penultimate day of expiry of current series, rollovers would dominate the session as well.

The levels of 8930 and 8975 would act as immediate resistance for the Markets. The downside supports come in much lower at 8790 and 8725 levels.
The RSI—Relative Strength Index on the Daily Chart is 75.6375 and it has reached its highest value in last 14-dayw which is bullish. It does not show any bullish or bearish divergence but it continues to trade in “overbought” zone. The Daily MACD continues to remain bullish while trading above its signal line.

On the derivative front, the NIFTY January series have shed over 66.73 lakh shares in Open Interest while February series have added over 87.56 lakh shares or over 268.24% in Open Interest. These figures are due to rollovers and total OI shows addition which continue to point out creation of long positions in the Markets.

Coming to pattern analysis, the Markets have attempted to move past one of the upper rising trend line. Another one exist at 8975 and this is a major resistance going by the structure of the Charts. This may cause greater resistance simply because of the fact that it is longer term trend line and the Markets have resisted this in last couple of months. Further to this, the Markets have risen over 845-odd points from the intraday lows it formed earlier this month. Coupled with the fact that it now trades clearly “overbought” it certainly cautions us in the immediate short term.

Overall, even if the overall up trend remains intact, a mild profit taking from higher levels or consolidation just cannot be ruled out. There are high chances that in case of any higher opening or any intraday up move, some amount of consolidation remains imminent. Keeping this in view, it is strongly suggested to refrain from making fresh purchases and remain highly selective for fresh longs. More importantly, all existing profits should be very vigilantly protected at higher levels. Overall, high degree of 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

Monday, January 26, 2015

Daily Market Trend Guide -- Tuesday, January 27, 2015

MARKET REPORT                                                                              January 27, 2015
Markets continued with its up move on Friday and ended the day with decent gain once again to close at its fresh life time highs. The Markets saw a gap up opening and opened on a better than expected note as it formed its intraday high of 8866.40 in the early minutes of the trade. After such gap up opening, it pared some of its gains in the late morning trade. Thereafter, it spent nearly entire session in a sideways trajectory. It went on to trade in sideways manner and remained in a very narrow trading range. However, the Markets maintained those gains an finally ended the day at 8835.60, posting a decent gain of 74.20 points or 0.85% while it continued to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JANUARY 27, 2015
The Markets shall open after a long weekend following holiday on account of Republic Day. Speaking purely on technical grounds, the Markets are likely to take some breather as it now trades overbought and have also resisted a rising trend line. However, following developments like QE by ECB, we might see its effect percolate opening session and might see positive opening as well. In either case, it would now become imperative to guard existing profits and positions.

The possible resistance levels would be 8866 and 8920 and supports would come in much lower at 8775 and 8710 levels.

The RSI—Relative Strength Index on the Daily Chart is 73.4949 and it has reached its highest value in last 14-days which is bullish. However, it now continues to trade “overbought”. No bullish or bearish divergences are seen as well. The Daily MACD remains bullish while it trades above its signal line. On the Weekly Charts, Weekly RSI is 70.5163 and it shows no failure swing. However, the NIFTY has formed a fresh 14-week high but Weekly RSI has not yet and therefore its shows a Bearish Divergence. Further, the Weekly RSI too trades in “Overbought” zone. Weekly MACD continues to remain bearish trading below its signal line.

On the derivative front, the NIFTY January futures have a negligible addition of 98,575 shares or 0.44% in Open Interest. We have expiry week, short of one day and therefore the entire week is expected to remain dominated with rollovers.

Going by pattern analysis, the Markets have resisted to a rising trend line at 8866 levels. Further, on the Weekly Charts as well, it has resisted a rising trend line resistance. Over and above this, the lead indicators on the Weekly Charts suggest clear possibility of consolidation at higher levels.

Overall, reading the technical indicators, on both Daily and Weekly Charts, we can fairly expect the Markets to see minor profit taking at higher levels and consolidate. However, importantly, it can also positively react to developments like QE by ECB and therefore might continue to surge ahead as well. Even if this happens, this rise now should be used to protect profit on existing positions. Fresh purchases should be made with restrain and vigilant protection of existing profits 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