Friday, January 8, 2016

Daily Market Trend Guide -- Friday, January 08, 2016

MARKET REPORT                                                                                     January 08, 2016
Getting mercilessly affected by weak global cues, NIFTY too ended the day with a deep cut after opening with a gap down. The Markets experienced Chinese jitters along with its Asian peers and opened on with a gap down. The Markets opened precisely at the important pattern support and immediately slipped below it. For the rest of the session, that pattern support levels remained resistance as the Markets reported day’s high of 7674.95. The Markets remained under constant pressure throughout the session. At no point did the Markets showed any inclination to take support or rebound. It remained in downward falling trajectory for the entire day and formed the day’s low of 7556.60, nearly testing its 52-day low again. It finally settled the day at 7568.30, posting a net loss of 172.70 points or 2.23% while forming a sharply lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, JANUARY 08, 2016
The Markets are poised at a very critical juncture. Today, we can expect a quiet opening in the Markets and also a mild technical pullback cannot be ruled out. However, at the same time, it is also important to note that the Markets nearly tested its 52-low support yesterday by trading just a whisker away from those levels. This level is a all important triple bottom support and any breach of these levels will induce weakness in the Markets.

For today, the levels of 7620 and 7645 are immediate resistance levels for the Markets. Supports come in at 7540 and 7420 levels.

The RSI—Relative Strength Index on the Daily Chart is 34.2071 and 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 is bearish as it trades below its signal line. On the Candles, A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow).  This usually implies a continuation of a bearish trend.  There have been 5 falling windows in the last 50 candles--this makes the current falling window even more bearish.  The two candles preceding the falling window were black, which makes this pattern even more bearish. Three black candles occurred in the last three days.  Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

On the derivative front, the NIFTY January series have added over 7.60 lakh shares or 3.65% in Open Interest. The NIFTY PCR stands at 0.85 as against 0.84 yesterday.

While coming to pattern analysis, the Markets formed yesterday’s low point very near to the 52-week lows of 7540 levels. It nearly tested these levels and thereby has taken support at a triple bottom formation. This is one of the major pattern supports for the Markets. Any breach below these levels will cause some good amount of weakness to creep in the immediate short term.  Though we can expect a flat opening today, it would be very important for the Markets to trade above 7540 levels.

All and all, though we can expect a flat opening in the Markets and even some amount of technical pullback, the Markets are not completely out of the woods. The protection of levels of 7540 will be of critical importance for the Markets.  It is advised to refrain from creating any fresh positions even in event of a mild technical pullback. Overall, continuance of cautious outlook 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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com



Thursday, January 7, 2016

Daily Market Trend Guide -- Thursday, January 07, 2016

MARKET REPORT                                                                                           January 07, 2016
Weakness persisted on expected lines in the Markets as it gave up after a flat session to end the day with losses. The Markets saw a modestly negative start and traded with capped losses in the morning trade. In the later part of the morning trade, it managed to recover modest losses to trade back in the positive for a brief period. The major part of the session was spent trading in a very narrow and capped range in sideways trajectory. The Markets posted some minor gains while it formed its intraday high of 7800.95. However, once again, the last hour and half of trade saw most of the undoing of the Markets. The Markets rapidly pared its gains almost in vertical manner and went on to form the day’s low of 7721.80, losing nearly 80-odd points from the high point of the day. It finally settled the day at 7741, posting a net loss of 43.65 points or 0.56% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, JANUARY 06, 2016
The Markets are poised for a gap down opening following weakness in the Asian peers due to rout in the Chinese Markets. We will not stay unaffected as the technical factors on the Daily Charts too remain weak. We will see the Markets opening gap down and remain with bearish undertone in the initial trade. However, there are faint chances that the Markets improve going ahead in the session but at the same time, it is likely to test and breach its logical pattern support of 7680 if the opening weakness persist.

For today, the levels of 7760 and 7785 will act as immediate resistance for the Charts. The support exist at 7730 and 7650 levels.

The RSI—Relative Strength Index on the Daily Chart is 42.8643 and 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 has reported a bearish crossover and is now bearish as it trades below its signal line.

On the derivative front, the NIFTY January series have added over 99375 shares or 0.48% in Open Interest. This figure, singularly speaking, remains negligible. However, there has been significant unwinding seen in the Cash segment along with existing shorts in the F&O segment.

Coming to pattern analysis, the Markets have breached its important pattern support of 7820-7840 range which exists in form of a rising trend line. Following that, the same levels acted as resistance as the highs of the days following the breach are below that rising trend line. Following weak opening which is almost imminent today, these resistance levels remain sacrosanct and we will continue to see weakness continuing in the Markets. If weakness persists and if the Markets show no signs of improvement, it is logically likely to test the other important pattern support zone of 7650-7680 range. Though it is not likely to happen immediately but any breach of these levels will see serious weakness creeping into the Markets in the immediate short term.

Overall, the outlook for today looks thoroughly bearish as gap down opening remains imminent. Over and above that, even if we see some improvement as we go ahead in the session, the same is likely to remain temporary as the Markets will continue to trade below its key resistance levels. Overall, it is advised to avoid any fresh purchases and maintain cautious to negative outlook on the Markets 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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Wednesday, January 6, 2016

Daily Market Trend Guide -- Wednesday, January 06, 2016

MARKET REPORT                                                                                       January 06, 2016
Markets remained choppy and traded precisely as analyzed. In a range bound session, the rising trend line continued to act as resistance as the Markets ended the day with minor losses. The Markets saw a stable opening but formed its intraday high of 7831.20 in the early minutes of the trade. Soon after this, the Markets gradually pared its gains to trade flat. By early afternoon trade, the Markets slipped once gain into negative while forming the low point of the day at 7763.25. However, the Markets attempted to recover its losses and at one point it traded flat once gain. The second part of the session remained much capped as the Markets oscillated in a very narrow range. It finally settled the day at 7784.65, posting a minor loss of 6.65 points or 0.09% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, JANUARY 06, 2016
Today’s analysis continues to remain more or less similar on yesterday’s grounds. We can expect the Markets to open on a flat note with a modestly bearish note and look for directions. The Markets have resisted today to the upward rising trend line as evident on the Charts. This level will continue to resist even if the Markets see any technical pullback. This level, until crossed on the upside, will continue to pose as a major pattern resistance in the immediate short term.

For today, the levels of 7820 and 7845 will act as immediate resistance levels for the Markets. Supports come in at 7750 and 7705 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.5712 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 trade above its signal line.

On the derivative front, NIFTY January series have gone on to add another over 4.75 lakh shares or 2.35% in Open Interest. This signifies some more addition of short positions in the Markets.

While having a look at pattern analysis, we had mentioned in our yesterday’s edition that he Markets have breached a pattern support which existed in form of a rising trend line. Now, it was all likely that that pattern / rising trend line would act as resistance. Yesterday, precisely in line with this observation, the Markets formed its intraday high below this level and therefore this level continued to pose resistance.  While keeping today’s analysis similar on yesterday’s lines, this rising trend line will continue to act as resistance in the immediate short term so long as the Markets trade below that. For any up move to occur, the Markets will have to move past these levels. Until that happens, all we would see would be mere technical pullbacks which would always remain susceptible to intermittent selling bouts.

All and all, the Markets, though are stable than a day before, are not completely out of the woods. Any sustainable up move shall occur only above 7850 levels and until that happens the Markets are likely to oscillate in a range even in event of technical pullbacks. It is advised to continue to remain modest on exposures while maintaining 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

Tuesday, January 5, 2016

Daily Market Trend Guide -- Tuesday, January 05, 2016

MARKET REPORT                                                                                January 05, 2016
Following global weakness, the Markets had a thoroughly disappointing session as it opened on a resilient note but then ended the day with a deep cut in line with its peers. The Markets saw a lower opening but it did show resilience as well. At one point of time in the morning trade, the Markets had managed to recover chunk of its opening losses while it formed its intraday high of 7937.55. However, it was the rest of the session that proved to be grossly disappointing one. The Markets started to pare recovered points once again and this time remained in falling trajectory for the rest of the session. While remaining in falling trajectory, the Markets kept making gradual lows. It went on the breach the important intraday supports while it formed its day’s low of 7781.10. It finally settled the day at 7791.30, posting a net loss of 171.90 points or 2.16% while forming a lower top and sharply lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, JANUARY 05, 2015
Markets may see some breather from the weakness that it saw yesterday but at the same time, some amount of bearish undertone is likely to persist for the immediate short term. The Markets are set to open on a quiet note and look for directions. It has breached certain levels yesterday and on the way up today, they are likely to pose some resistance to the Markets.  The Markets have penetrated the support of rising trend line and this is likely to pose resistance to the Markets going ahead.

For today, the levels of 7840 and 7875 will act as immediate resistance for the Markets. The supports come in at 7740 and 7715 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.9819 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above it signal line.

On the derivative front, the NIFTY January series have added over 8.04 lakh shares or 4.14% in Open Interest. This clearly indicates addition of fresh shorts in the system.

Coming to pattern analysis, we have been mentioning often in our previous edition of Daily Market Trend Guide that the levels of 100-DMA and 8000, have remained sacrosanct. These levels once again continued to remain major resistance for the Markets. In yesterday’s session, the Markets have violated one important pattern support. This pattern support is in form of a rising trend line drawn from the lows of the Markets which it formed in September 2015. The Markets have violated this support and therefore in event of any pullback, this level might pose some resistance to the Markets.

All and all, volatility and uncertainty will rule the Markets in the immediate short term. With the yesterday’s downside, the structure of the Charts have somewhat got damaged to some extent and it will a while by the time the Markets gathers its momentum on the upside once again. The levels of 7840-7860 will continue to pose resistance in event of any pullback. It is advised once again to remain very selective on stocks and curtail the overall exposures in the Markets for the immediate short term.

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