Friday, December 4, 2015

Daily Market Trend Guide -- Friday, December 04, 2015

MARKET REPORT                                                                                  December 04, 2015
The Markets wore a highly disappointing bearish undertone especially in the final hour of the trade as it ended the day with losses near the low point of the day. The Markets saw a negative opening and spent the morning session in a ranged trade while forming the day’s high at 7912.30. After spending the morning trade in a sideways trajectory, the Markets slipped further in afternoon trade. By late afternoon though, the Markets managed to recoup much of its losses and traded only with modest losses. However, it was last hour and half of the trade that did most of the undoing. The Markets saw a gradual but near parabolic paring of gains as it sharply went on to form the day’s low of 7853.30. No major recovery was seen and the Markets ended the day at 7864.15, posting a net loss of 67.20 points or 0.85% while forming a sharply lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, DECEMBER 04, 2015
Knee-jerk reaction to the lesser-than-expected stimulus from ECB would be not as sharp as the European Markets but we can certainly expect our Markets to open on a lower note and look for directions. Some amount of weakness may continue to persist for some more time but the intensity is not expected to be sharp. The volumes and participation is likely to remain lower as well.

For today, the levels of 7900 and 7945 are immediate resistance levels for the Markets. The supports are expected to come in at 7820 and 7775 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.0825 and it 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 December futures have added 30,750 shares or 0.16% in Open Interest. This figure remains nominal but we can certainly interpret that there has been no major offloading of positions in yesterday’s session.

While having a look at pattern analysis, it is largely evident that after attempting to break out of the congestion zone that the Markets formed in November, it greatly resisted to the 8000-levels which also happened to be its major pattern resistance and it also coincided with its 50-DMA. While the Markets failed to take any directional call around these levels, it lost ground failing to get any triggers. Now, the Markets are likely to enter and remain once again into that congestion zone and might drift lower lacking any directional guidance. However, during all this the volumes are expected to remain lower and there can be some technical pullbacks as well.

Going by all this, given the direction-less nature of the Markets it is best advised to avoid taking any fresh positions. Though the Markets are drifting lower, it may also see some pullbacks as well but overall is not likely to take any clear directional bias in immediate short term. It is advised to keep exposure at very modest levels while preserving liquidity and continuing to adopt a cautious outlook on 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Thursday, December 3, 2015

Daily Market Trend Guide -- Thursday, December 03, 2015

MARKET REPORT                                                                             December 03, 2015
Yesterday’s session continued to remain yet another disappointing range bound session as the Markets could not sustain its positive opening and ended the day with modest losses.  The Markets saw a modestly positive opening and formed its intraday high of 7979.30 in the early minutes of the morning trade. However, soon after this, the Markets pared its gains to trade flat. The weakness in the Markets intensified more in the late morning trade as the Markets went on to form the day’s low of 7910.80. Some recovery was seen in the last hour of the trade but before that the Markets spent a directionless session which remained in a very capped and narrow range. The Markets finally settled the day at 7931.35, posting a net loss of 23.55 points or 0.30% while forming a slightly higher top but lower bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, DECEMBER 03, 2015
Today’s analysis once again continues to remain more or less on similar lines. The Markets are likely to open on a modestly negative note and look for directions. Though the Markets have attempted to move out of the congestion zone, it is continuing to resist to its pattern resistance and 50-DMA levels which exist in the range of 8000-8005 levels. Until the Markets manage to move past these levels, we will continue to see subdued movements with the Markets continuing to remain vulnerable to selling pressures from higher level.

For today, the levels of 7960 and 8010 will act as immediate resistance levels for the Markets. The supports come in at 7905 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.4371 and it 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 December futures have shed over 1.63 lakh shares or 0.84% in Open Interest. This figure does not suggest any major shift of sentiment in the Markets. The NIFTY  PCR stands at 0.84 as against 0.87.

Coming to pattern analysis, the Markets have continued to resist to its key pattern resistance levels of 8000. As mentioned earlier, the 50-DMA of the Markets is 8003 and these two levels collectively pose a important resistance to the Markets. It would be critically important for the Markets to move past these levels if it has to make any decisive up move. Not only will the Markets have to move past these levels, it will have to do it with good amount of participation and volumes as well. As often mentioned in our previous editions, until this happens, the Markets will continue to trade in a range with intermittent selling bouts from higher levels even if the undertone remains buoyant.

All and all, while keeping the analysis on the same lines, we continue to reiterate to refrain from shorts as both lead indicators and F&O data suggest underlying buoyancy in the Markets. Somewhat sentimental reactions can be expected to the ECB meet today wherein some stimulus are expected but overall, speaking purely on technical terms, fresh up moves will occur only above 8000-8010 levels.  Until then, highly stock specific approach with protection of profits at higher levels should continued to be adopted.

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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Wednesday, December 2, 2015

Daily Market Trend Guide -- Wednesday, December 02, 2015

MARKET REPORT                                                                             December 02, 2015
Markets once again had a range bound session as the RBI Credit policy remained a non-event on expected lines. The Markets saw a modestly positive opening and it traded with capped gains in the morning trade. While RBI Policy review came up wherein RBI kept all rates unchanged which was anyway expected, the Markets saw some sharp activity while it formed its day’s low of 7934.15. It soon recovered from those levels and came back in the range that it was trading since morning. Markets managed to move past its range while forming day’s high of 7972.15 but soon returned to its trajectory once again. The entire session was spent more or less in sideways trajectory and the Markets finally settled the day at 7954.90, posting a modest gain of 19.65 points or 0.25% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, DECEMBER 02, 2015
Markets have been making reluctant attempts to move past its congestion zone and today as well, we are likely to see a modestly positive opening in the Markets. Though the Markets are now past the outcome of GDP numbers, IIP Data and RBI Credit Policy review, it has not been taking a clear directional call as it trades near its pattern resistance. Today’s opening too would see the Markets opening around its resistance levels and therefore the intraday trajectory that the Markets form after opening would be crucial to watch out for.

For today, the levels of 7970 and 8010 will act as immediate resistance levels whereas supports would come in at 7920 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 51.4716 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, the NIFTY December futures have added over 3.03 lakh shares or 1.58% in Open Interest. The NIFTY PCR stands at 0.87 as against 0.91 yesterday. The Markets have been seen building a base in this range and this keeps the undercurrent buoyant.

While having a look at pattern analysis, the Markets have been attempting to move out of the congestion zone that it has been trading in the previous fortnight. However, though the Markets have managed to move out of this zone, it has not done so decisively and with conviction. It has been making a reluctant up moves and at the same time, it is also approaching its important pattern resistance which also coincides with its 50-DMA. It would be important to see the behavior of the Markets vis-à-vis these levels.

All and all, for any decisive up move to come in, the Markets will have to move past the levels of 8000-8010 which happens to incorporate an important pattern resistance as well as the 50-DMA. Until this happens, we will continue to see the Markets trading in a capped range and also remain susceptible to selling bouts from higher levels. However, with the lead indicators suggesting the undertone being buoyant, stock specific approach with selective but limited buying should be adopted while continuing to protect profits at higher levels.

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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Tuesday, December 1, 2015

Daily Market Trend Guide -- Tuesday, December 01, 2015

MARKET REPORT                                                                               December 01, 2015
Markets spent a very capped and narrow session as the caution weighed in heavily ahead of two important numbers that the Markets expected. The Markets saw a quiet and subdued opening as it opened a bit lower. After trading briefly into a capped range the Markets formed its intraday high of 7966 in the early morning trade. Thereafter the Markets transformed itself into a sideways trajectory and spent the entire session in a very narrow and capped range. The Markets saw no directional bias at all as the entire session was spent in a narrow 25-odd points range. At one point in the late afternoon trade, the Markets slipped a bit to form the day’s low of 7922.80. However, it settled the day at 7935.25, posting a net loss of 7.45 points or 0.09% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, DECEMBER 01, 2015
The GDP Numbers that came out stood at 7.4%, little better than the estimates of 7.3% and the IIP numbers too remained in line with the expectations. The Markets are set to open on a flat to quietly positive note following this and would look forward to RBI Credit Policy review which is slated to come up later today. However, it is important to note that with no rate cut expected this time, it is very much likely to remain a non-event.

For today, the levels of 7960 and 8010 will act as important resistance levels for today. The supports come in at 7905 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.8733 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish as trades above its signal line.

On the derivative front, the NIFTY December futures have added over 4.74 lakh shares or 2.54 lakh shares in Open Interest. Though the Markets have traded in a capped range, fresh positions have been built in the index as well as stock futures resulting in addition of Open Interest.

Coming to pattern analysis, the picture remains similar to what we explained in the yesterday’s edition. The Markets have attempted to form a base but are yet to confirm it. In event of any up move, they are likely to approach its pattern resistance levels of 8000 which also coincides with its 50-DMA. The Markets will need to move past these levels for any decisive directional call. Until the Markets resist these levels, we will continue to see a range bound congestion zone continuing to exist with the Markets remaining vulnerable to selling bouts.

Overall, the opening is expected to be quiet and positive and the Markets are likely to trade in a capped range until it reacts to the RBI Policy Review. With no rate cut expected, this too is likely to remain a non-event. The markets will be able to make a decisive directional call only after it moves past 8000-levels. Until this happens, it will continue to lack any directional bias though the undercurrent remains positive.

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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com