Friday, August 28, 2015

Daily Market Trend Guide -- Friday, August 28, 2015

MARKET REPORT                                                                                          August 28, 2015
Very much on expected lines, the Markets saw a sharp technical pullback yesterday as it opened positive, got stronger and ended the day with decent gains. Following positive global cues, the Markets saw a positive opening and traded with capped gains in the morning trade. The Markets got stronger as it surged ahead in the afternoon trade to form the day’s high of 7963.60. The Markets formed this high in the afternoon trade and thereafter again traded in sideways trajectory. The Markets spent the major part of the second half of the session in the sideways trajectory and maintained its gains. The session remained much stable than expected and the Markets finally ended the day at 7948.95, posting a net gain of 157.10 points or 2.02% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, AUGUST 28, 2015
Today as well, in absence of any negative global inputs, the Markets are likely to continue with its technical pullback. It is very much likely that the Markets see a gap up opening today and on similar lines that of yesterday, it would be critical for the Markets to maintain the opening gains. The gap created between 8060 and 8225 will pose resistance for the Markets on the upside.

For today, the levels of 8000 and 8060 are immediate resistance on the Charts. The supports come in at 7860 levels.

The RSI—Relative Strength Index on the Daily Charts is 35.6019 and it has just moved above from its oversold zone. It is neutral as it does not show any bullish or bearish divergence or any failure swings. The Daily MACD however continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have added over 43.38 lakh shares or 25.97% in Open Interest. The September series have begun with PCR of 0.94 as against 0.74 yesterday. There has been considerable amount of short covering yesterday accompanied with modest fresh longs.

Coming to pattern analysis, technically speaking the zones of 7960-8000 were likely to act as major resistance for the Markets while it pulls back. The reason was that it was a major triple bottom pattern support that the Markets broke on the downside and therefore it was expected to act as resistance. However, today’s gap up opening is likely to cause the Markets to open above these levels and therefore, it would be critical for the Markets to maintain levels above this. On the way up, the gap created between 8060-8225 will continue to offer resistance for the Markets for couple of days.

All and all, gap up opening expected again today but it is also likely that more of short covering continues. It would be important that we see more amount of fresh buying coming in as well as it would be essential for the Markets to maintain itself above 8000-levels in coming sessions. It is also likely that we see some paring of gains later in the day but more or less the gains are likely to be maintained. Overall, modest exposures with cautious optimism are advised for the day.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Thursday, August 27, 2015

Daily Market Trend Guide -- Thursday, August 27, 2015

MARKET REPORT                                                                                           August 27, 2015
Both, volatility and bearish undertone refused to let the Markets go as the Markets pared all of its day’s gain to end the day with losses. The Markets opened negative but saw a relatively resilient opening as compared to its global peers and in the morning traded crawled into the positive territory wiping out all of its morning losses. It further went into positive territory and strengthened further to form the day’s high of 7930.25. These modest gains were not sustained as the Markets gradually pared all of them.  Markets slipped into the negative but spent the afternoon trade in a narrow range with capped losses. It was the late afternoon trade that the Markets saw weakness creeping in once again. It lost ground further and went on to form the day’s low of 7777.10, giving up nearly 150-odd points from the high point of the day. It finally ended the day at 7791.85 posting a net loss of 88.85 points or 1.13% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR Thursday, 27 August 2015
Today, we enter the expiry of the current derivative series. Though the global cues remain positive and we are likely to open on a decently positive note, there would be great amount of volatility that shall remain ingrained in the Markets. The Markets continue to remain oversold and there are chances of a technical pullback, it would be critically important to see if the Markets maintain its opening gains. Volatility would simply refuse to leave the Markets and therefore, it continues to keep our analysis more or less same on similar lines as that of yesterday.

For today, the levels of 7925 and 7990 shall continue to act as immediate resistance for the Markets. Supports come in lower at 7750 and 7660 levels.

The RSI—Relative Strength Index on the Daily Charts is 26.8153 and it continues to remain in “oversold” territory. Though it does not show any failure swing, the NIFTY has made a fresh low but RSI has not yet and this is Bullish Divergence.

On the derivative front, NIFTY August series shed over 19.39 lakh shares or 14.44% in Open 
Interest. The September series added over 43.80 lakh shares or 35.54% in Open Interest. This results into net addition of 24.40 lakh shares in Open Interest. This very clearly translates creation of fresh short positions in the Markets.

Coming to pattern analysis, the Markets have continued to remain in “oversold” territory and today pose a great chance for a technical pullback. It is important to note that under no circumstances that pullback of any nature should be construed as a reversal. The 7950-8000 zones had been a very critical support zone which the Markets have broken on the downside. On its way up, this is bound to act as a major resistance for the Markets. This is likely to keep the Markets in a broad trading range until the oscillators repair itself and owing to this, as mentioned earlier, volatility will continue to remain ingrained in the immediate short term.

All and all, though positive opening is expected, it would be equally important to see if the Markets are able to maintain those gains and are able to capitalize on that. It would be important for the Markets to sustain the opening gains and build up on that. However, intermittent bouts from higher levels cannot be ruled out as the session will continue to remain dominated with rollovers. Overall, while maintaining adequate liquidity, modest positions should be taken on highly selective basis.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com


Wednesday, August 26, 2015

Daily Market Trend Guide -- Wednesday, August 26, 2015

MARKET REPORT                                                                                     August 26, 2015
The Markets continued to taste its dosage of volatility as it failed to capitalize on its opening gains, dipped to a fresh low and then recovered to end the day with gains. The Markets saw a expected but modest gap up opening and after opening strong in the initial trade and formed its intraday high of 7925.40 in the early minutes of the trade. However, post this strong opening, the Markets pared all of its 100+points of gains by late afternoon trade and traded flat. The weakness intensified in the early afternoon trade as the Markets slumped to a fresh low of 7667.25, by afternoon, coming off nearly 258-odd points from its opening highs. However, the second half of the session saw the Markets recovering once again from the low point. It not only recouped all of its losses but went on to trade in the positive. After witnessing nearly 375-odd points of volatility, the Markets finally ended the day at 7880.70, posting a net gain of 71.70 points or 0.92% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, AUGUST 26, 2015
Markets saw a heavy short covering and some buying led recovery yesterday. Today, we are again set to see a gap down opening but on the similar lines, it would not be surprising if the Markets see recovery as we go ahead in the session. Volatility is going to remain ingrained in the Markets for quite some time now and today as well, we will continue to see volatility in the session at every level as the even without any gap down, the Markets still continues to remain “oversold”.

For today, the levels of 7925 and 7980 will act as immediate resistance for the Markets. The supports come in at 7780 and 7710 levels.

The RSI—Relative Strength Index on the Daily Chart is 28.8851 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. Daily RSI still trades in “oversold” territory. The Daily MACD continues to remain bearish as it trades below its signal line. On the Candles, a long lower shadow has occurred. This is typically a bullish signal, as in case of NIFTY, as it has occurred near a low price level when the NIFTY has been in “oversold” territory.

On the derivative front, NIFTY August futures have shed over 27.59 lakh shares or 17.04% in Open Interest. The September series have added over 44.26 lakh shares or 56.03% in Open Interest. The silver lining is that the NIFTY has witnessed a net addition of 16.50 lakh shares in Open Interest. The NIFTY PCR stands at 0.78 as against 0.76 yesterday.

Coming to pattern analysis, as mentioned in our yesterday’s edition of Daily Market Trend Guide that the Markets have breached its Head and Shoulder formation neckline. However, at the same time, while breaking down on the downside, the Markets have declined much more than its usual measuring implication arising out of such formations. Further, the Markets have been in oversold territory and after yesterdays up move, it has remained in oversold territory. With today’s gap down opening expected again, the session is likely to remain heavily volatile but downsides are not likely to sustain at Close levels due to the oversold nature of the Markets.

All and all, we continue to reiterate our advice to keep away from any major exposures in the Markets. Further shorts should be strictly avoided and the Markets are set to see sharp short covering at any given time and this remains imminent. While maintaining liquidity, highly cautious approach should be adopted 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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Tuesday, August 25, 2015

Daily Market Trend Guide -- Tuesday, August 25, 2015

MARKET REPORT                                                                                   August 25, 2015
Markets witnessed total carnage and destruction following global weakness as it opened gap down and went on to post largest intraday loss since 2009. The Markets saw a gap down opening which was as such on expected lines. It did continued to trade with opening losses in a  capped range in the morning trade but real carnage intensified in the second half of the session.  The Markets not only went on to break psychological 8000 mark but went on to breach its double bottom support of 7962 levels significantly. The sell-off which lead to one of the highest FII sell-offs in recent history went on to defy all levels as the Markets went on to touch the intraday low of 7769.40. No major support was seen coming in at any point of time as the Markets finally ended the day at 7809, posting a massive loss of 490.95 points or 5.92% forming a sharply lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, AUGUST 25, 2015
Markets have formed an extremely bearish structure breaking down violently from the neckline of the bearish Head and Shoulders formation on the Daily Charts. While this has happened, the Markets have moved past is possible measuring implications on the downside and have got highly oversold has well. Following this, we are likely to see a gap up opening in the Markets and see the Markets opening with decent gains. However, key would be to see if the Markets maintain these gains and capitalize on it as the triple bottom support of 7950-7980 zones will now act as resistance.

For today, the levels of 7910 and 7970 will act as immediate resistance for the Markets. The supports will now exist at 7750 and 7640 levels.

The RSI—Relative Strength Index on the Daily Chart is 24.5194 and it now trades in ‘oversold’ territory. It has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD continues to trade below its signal line and is therefore bearish.

On the derivative front, NIFTY August futures have added over 14.56 lakh shares or 9.88% in Open Interest. This now indicates massive short positions in the Markets.
Coming to pattern analysis, the Markets have broken down after a bearish head and shoulders formation on the Daily Charts over last two sessions. The usual measuring implication would have set the targets on the downsides at 7950-8100 levels but the global turmoil added more fuel to the fire and the Markets went down much beyond that. In the process, it has also breached its triple bottom support of 7950-7980 zones and these levels are now expected to act as resistance on the upside. Today’s expected upside opening will cause the Markets to open near these levels and therefore it would be utmost critical for the 
Markets to sustain these levels and manage to remain above that.

Overall, there would be great amount of volatility that shall remain ingrained in the Markets. As mentioned, the 7950-7980 zones will continue to pose resistance and it would be imperative for the Markets to sustain the opening gains. Though great amount of shorts have been seen built up in the system, the overall structure of the Markets shall make it difficult to pose a easy recovery. While maintaining adequate liquidity, it is advised to stay away from taking any major exposures in the Markets.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com