Friday, June 12, 2015

Daily Market Trend Guide -- Friday, June 12, 2015

MARKET REPORT                                                                                         June 12, 2015
Markets had a terribly disappointing session as it gave away more than it had gained in the previous session to end the day with a deep cut. The Markets saw a stable opening on expected lines and formed its intraday high of 8163.05 in the early minutes of the trade. It remained in positive territory briefly in the morning trade. It was in the late morning trade and thereafter that bearish grip took hold of the Markets as it slowly pared all of its gains and dipped into the negative. It remained in the session pressure until the end of the session which also intensified at the later stage. The Markets went on to breach the psychological 8000-mark to form the day’s low of 7958.25. No major recovery was seen and it finally ended the day at the lowest levels since October last year at 7965.35, posting a net loss of 159.10 points or 1.96% while forming a higher top but lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, JUNE 12, 2015
Markets have ended the day yesterday at the lowest point of the day. Technically speaking, it is likely to open on a modestly positive note and trade positive in the initial trade. However, there appear faint chances as indicated by lead indicators and the F&O data that the Markets may not significantly move down from current levels. There are faint chances that the Markets may once again attempt a pullback while holding on to the current support levels.

The levels of 8000 and 8075 are immediate resistance for the Markets. The supports exists much lower at 7940 and 7875 levels.

The RSI—Relative Strength Index on the Daily Chart is 34.9029 and it does no show any failure swing. However, the NIFTY has made a fresh 14-day low while RSI has not. This is Bullish Divergence. Daily MACD remains bearish while it trades below its signal line. Further on the Candles, An engulfing bearish line occurred (where a black candle's real body completely contains the previous white candle's real body). If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with NIFTY), it may be a last engulfing bottom which indicates a bullish reversal.  The test to see if this is the case is if the next candle closes above the bottom the current (black) candle's real body. Therefore, this needs confirmation.

On the derivative front, NIFTY June futures have added over 11.85 lakh shares or 7.67% in Open Interest. This very clearly suggests that significant short positions have been added. NIFTY PCR stands at 0.83.

Coming to pattern analysis, the Markets have breached its short term double bottom support of 8000. Primarily speaking, this is likely to induce some more weakness in the Markets. However, having said this, there are still faint hopes that the Markets may hold this levels at Close as they still trade within its filter. Further, the lead indicator also indicates a mild bullish divergence while may not allow the Markets to offer any significantly more downside. Candles also show a potential bottom formation. However, all these need confirmation.

All and all, the Markets certainly not out of the woods and might see some more temporary weakness, at least in the initial trade. However, factors like heavy addition in Open Interest indicating shorts, bullish divergence on the lead indicator, and signs of a potential bottom formation on the Candles, offer some hope of a technical pullback even if the Markets continue to remain in an overall downtrend. Cautious outlook should be continued 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

Thursday, June 11, 2015

Daily Market Trend Guide -- Thursday, June 11, 2015

MARKET REPORT                                                                                    June 11, 2015
After seven straight day of looses, the Markets saw a smart relief rally yesterday as it ended the day with smart gains. The Markets saw flat opening on expected lines and soon gathered some gains in the initial trade. In the late morning trade, the Markets gathered some more strength and kept posting fresh gradual highs and traded sideways while maintaining those gains. It perked up further in the last hour and half of trade as it went on to form the day’s high of 8152.25. Though the Markets saw some minor paring of gains from the high point of the day, it comfortably maintained its gains. It finally ended the day at 8124.45, posting a decent gain of 102.05 points or 1.27% forming a sharply higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, JUNE 11, 2015
Markets are expected to open today on a positive note and are most likely to continue with their yesterdays up move. However, most importantly, today’s session will continue to remain a crucial session because the up move that we saw yesterday has been purely on account of short covering. If the Markets are to capitalize on this up move, it will have to move upwards on back of fresh buying as mere short covering will not take it far.

For today, the levels of 8190 and 8250 will act as resistance for the Markets. The supports exists at 8050 and 8000 levels.

The RSI—Relative Strength Index on the Daily Chart is 41.5782 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it still continues to trade below its signal line.

On the derivative front, the NIFTY June futures have shed over 9.70 lakh shares or 5.92% in Open Interest. This very clearly shows that yesterday’s up move has purely been on account of short covering from lower levels.

Coming to pattern analysis, the Markets have, at least as of today, taken support at its double bottom levels of 8000. It would be crucially important for the Markets to maintain itself above this level if it has to once again attempt a reversal. The Markets have immediate resistance at 200-DMA levels. The levels of 100-DMA is too is declining  and is set to cross 200-DMA from above in coming sessions. If this persists, the Markets may find it self in a broad consolidation zone waiting for a confirmed reversal.

Overall, though the Markets ended on a robust note yesterday they are likely to continue their up move today as well; we continue to reiterate caution in the Markets. Until the Markets reports up moves on back of fresh buying, all purchases should be kept limited with very vigilant protection of profits, if any, 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
+91-98250-16331



Wednesday, June 10, 2015

Daily Market Trend Guide -- Wednesday, June 10, 2015

MARKET REPORT                                                                                   June 10, 2015
The Markets had a very lackluster session as it spent the day in a very narrow and capped range while almost testing the double bottom support of 8000-levels. The Markets saw a modestly negative opening but soon crawled into the positive territory in the morning trade while forming  the day’s high of 8057.15. The Markets again slipped into the red after a very brief trade in the positive territory and after this the Markets spent nearly entire session trading very flat and in a capped range and spending very brief periods in the positive. It lost ground in the final hour and half of trade and slipped little more to form the day’s low of 8005.15. Modest recovery was seen from these levels and the Markets finally settled the day at 8022.40, posting a modest loss of 21.75 points or 0.27% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, JUNE 10, 2015
Today, we once again continue to keep the analysis on similar lines that of yesterday. We can expect the Markets to open on a flat note and would expect it to improve as we go ahead in the session. Though the Markets may trade range bound in the initial trade, the levels of 8000 will still continue to act as major support. The decision of MSCI to not to include China A-Class shares will also aid the sentiment as this action would also have impacted Dollar outflows from the Indian Markets.

For today, the levels of 8060 and 8125 will act as resistance whereas the levels of 8000 and 7940 will act as supports.

The RSI—Relative Strength Index on the Daily Chart is 34.0677 and this has reached the lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 1.32 lakh shares or 0.81% in Open Interest. This denotes mild unwinding of positions.

Coming back to pattern analysis, the Markets have nearly tested its double bottom support of 8000 levels and this support level continues to remain a important support – both technically and psychologically. Any breach below this is likely to cause some more weakness in the immediate short term. However, given the lead indicators on the Charts, the F&O data and the currency move suggest that we are very much likely to take support at this level, at least for the immediate short term.

All and all, as mentioned, the Markets will have to maintain itself above the 8000 level in order to avoid any weakness from creeping in. The behavior of the Markets vis-à-vis the levels of 8000 would be crucially important to watch out for. Selective bottom hunting can be done in select stocks as overall the Markets are likely to remain very much stock specific. With expectation of support to hold through, cautious optimism 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, June 9, 2015

Daily Market Trend Guide -- Tuesday, June 09, 2015

MARKET REPORTU                                                                                 June 09, 2015
Markets wore a completely bearish mask today as well as it continued to end at the lowest point in 2015 after opening on a flat note. The Markets opened on a very quiet note and formed its intraday high of 8131 in the very early seconds of the trade. After remaining momentarily in the positive zone, it slipped into negative in the early morning trade. It formed a downward sloping channel thereafter and showed totally bearish directional bias. It was in the late afternoon trade that the Markets attempted to show some pullback as it managed to recover over half of its losses, though it continued to remain in negative territory. However, this recovery was not sustained and the Markets slipped again to form its intraday low of 8030.55. It finally settled the day at 8044.15, posting a net loss of 70.55 points or 0.87% while forming a distinctly lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, JUNE 09, 2015
The Markets are likely to open on a modestly negative to flat note and will look for directions in the initial trade. Though we continue to put the analysis on more or less the similar lines, we also put forward mild possibilities of a attempt to pullback by the Markets given the technical structure of the Chart as well as the F&O Data. In any case, the levels of 8000 will continue to remain import support level to watch out for.

The levels of 8110 and 8145 will act as immediate resistance for the Markets; whereas the levels of 8000 and 7940 are immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 34.9571 and it does not show any bullish or bearish divergence. However, it has reached its lowest value in last 14-days which is bearish. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed 88,200 shares or 0.54% in Open Interest. This figure remains insignificant but it suggest a very mild tinge  of unwinding of positions.

Coming to pattern analysis, the Markets are nearing its support of 7997-8000 levels. Any persistent weakness will see the Markets testing those levels. However, that will also act as a minor double bottom support for the Markets. Given the PCR of 0.87, and given the lower volumes with which it is declining, there are strong possibilities that the Markets may take some sort of at least interim support at this level. Even with some chances of a possible technical pullback, the Markets will have to maintain themselves above 8000-levels in order to avoid any psychological weakness to creep in.

Overall, though the overall structure of the Markets remains weak, it also poses some faint technical possibilities of a pullback. However, it would be imperative for the Markets to maintain itself comfortable above 8000-8050 mark. Any breach will bring in further weakness. Fresh bottom buying may be done but we continue to reiterate to keep overall exposure very low and stock specific.

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