Friday, January 15, 2016

Daily Market Trend Guide -- Friday, January 15, 2016

MARKET REPORT                                                                                       January 15, 2016
Markets traded precisely on analyzed lines as it opened lower but at the same time recovered and ended the day with just minor losses while continuing to resist to 7540 levels. The markets saw a gap down opening once again following global weakness but formed its intraday low of 7443.80 in the early minutes of the morning trade. Thereafter, the Markets transformed itself into rising trajectory as it recovered from the low points of the day. It not only recovered all of its losses but went on to trade in the positive territory. By afternoon trade, the Markets formed its intraday high of 7604.80, rising once again over 160-odd points from the low point of the day. However, it came off in the late afternoon trade and settled the day at 7536.80, posting a net loss of 25.60 points or 0.34% while forming higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, JANUARY 15, 2016
The markets are likely to see a flat to mildly positive opening and once again place themselves at a critical juncture. The likely opening levels will see the Markets opening above 7540-7550 levels and it would be once again critically important for the Markets to maintain itself above these levels. It seems that the Markets have formed its bottom for the immediate short term but at the same time, it is likely that all we see is merely a technical pullback while continuing to remain vulnerable to possible downsides in coming weeks.

For today, the levels of 7575 and 7610 are immediate resistance levels for the Markets. The supports come in at 7475 and 7440 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.92.90 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY January futures have added over 1.58 lakh shares or 0.71% in Open Interest. Shorts continue to exist in the system. NIFTY PCR stands at 0.83 as against 0.80 yesterday.

While having a look at pattern analysis, the Markets have breached the important pattern support of 7540-7550 levels thrice and have pullback from the fresh lows that has made. If we take a immediate short term view, the likely opening levels for today will see the Markets opening above these levels. So long as the Markets maintain itself above these levels of 7540-50, it may see some technical pullback and mild relief rallies. The nearly oversold nature of the Global Markets and likely technical pullbacks there will see our Markets posting some mild technical rallies as well. However, if we take a short to medium term view, the overall structure of the Charts remain bearish and even with the possible technical pullbacks, we would continue to remain vulnerable to the sell offs in the short to medium term.

All and all, given this scenario, we advice to make selective purchases and remain stock specific. It would be important to keep the exposures at moderate levels and even more important to exit with the rallies, if any, and protect profits vigilantly at higher levels. 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 14, 2016

Daily Market Trend Guide -- Thursday, January 14, 2016

MARKET REPORT                                                                                      January 14, 2016
Markets saw tremendous amount of volatility yesterday after its plunged to a fresh 52-week lows and then recovered later in a V-shaped recovery after swinging 165-odd points on either side. The Markets saw a positive and stable opening and formed its intraday high of 7590.95 in the morning session of the trade. The Markets remained in sideways trajectory in the first hour and half of trade but saw sudden weakness creeping in thereafter. The Markets saw a near vertical fall in the early afternoon trade as it erased all of its morning gains to dip in the negative. It saw sharp weakness being extended as it saw the low point of the day at 7425.80, coming off nearly 165-odd points from the high point of the day. However, it was the late trade that saw an equally sharp recovery and recovered very sharply to trade back in the green. It finally ended the day at 7562.40, posting a modest gain of 52.10 points or 0.69% while forming a similar top but lower bottom on the Daily Bar Charts.
 
MARKET TREND FOR THURSDAY, January 14, 2016
The session is all likely to remain very much volatile today with the levels of 7540 playing the important role once again. Today, we can expect a negative start to the Markets once again. There are two things to consider at this time. With the levels of the lower gap down opening expected, the Markets will once again get nearly oversold and secondly, the opening is likely to be once again below the levels of 7540 and therefore the levels of 7540 will be critical to watch out for once again.

For today, the levels of 7590 and 7645 are immediate resistance levels on the Daily Charts, the supports would exist at 7480 and 7430 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.1729 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stands bearish as it continues to trade below its signal line. On the Candles, a long lower shadow occurred which typically suggests bottom formation for the immediate short term.

On the derivative front, the NIFTY January futures have added over 4.13 lakh shares or 1.90% in Open Interest.  The NIFTY PCR stands at 0.80 as against 0.78 yesterday. It should be noted that in absence of any major net FII sell figure, there is large amount of short position that exists in the system.

Coming to pattern analysis, we can have two types of readings; for the immediate short term and the other one for the medium term. If we take the immediate short term view, we can fairly expect that the Markets will show some amount of resilience at lower levels and we can expect a short – covering led technical pullbacks of the kind we witnessed yesterday. At the same time, the levels of 7540-7600 will continue to act as major resistance zone for the Markets in the immediate medium term. So, there are fair chances that we see resilience at lower levels  in the coming day, but see the Markets consolidating at somewhat higher levels with a negative bias.

All and all, so far as today is concerned, there are mild chances that we see the Markets improving as we go ahead in the session. There are chances that even if the rallies are not supported by major buying, some short covering led rallies can be seen. In event of any downsides, shorts should be avoided and very selective stock specific purchases may be made.  In event of pullbacks, such pullbacks should be utilized to protect profits while maintaining a very 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

Wednesday, January 13, 2016

Daily Market Trend Guide -- Wednesday, January 13, 2016

MARKET REPORT                                                                                      January 13, 2016
What was a better-than-expected start to the Markets fizzled out during the day as the Markets made fresh 52-week lows and ended the day with losses. The Markets saw a positive opening and formed its intraday high of 7588.30 in the early trade. The Markets traded with capped gains in the morning trade but it remained positive only for a brief period. It slipped slowly into negative territory by late morning trade. It hovered around the 7540-mark but gradually slipped below that as well. It continued to drift gradually and by late afternoon trade, it formed its day’s low at 7487.80. It traded sideways in the last hour of the trade but made no attempts to recover. It finally settled the day at 7510.10, posting a net loss of 53.55 points or 0.71% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, JANUARY 13, 2016
Markets are likely to see a decently positive opening today following stable Global Markets. However, at this juncture, we would like to add a word of caution. To begin with, today’s expected opening levels will see the Markets opening just above 7540 levels. These are important triple bottom support which the Markets broke on its way down yesterday. Therefore, it would be critically important for the Markets to build up on today’s expected opening gains.

For today, the levels of 7540 and 7575 will act as immediate resistance levels. The supports come in at 7470 and 7410 levels.

The RSI—Relative Strength Index on the Daily Chart is 32.7747 and it has reached its lowest value since last 14-days which is Bearish. However, it does not show any bullish or bearish divergence. The Daily MACD stays bearish as it trades below its signal line. On the Candles, Bullish Engulfing Pattern has occurred. If this 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.
 
On the derivative front, the NIFTY January futures have shed over 1.70 lakh shares or 0.78% in Open Interest. The NIFTY PCR stands at 0.78 as against 0.81 yesterday.

Let us have a look at the pattern analysis. The Markets had the levels of 7540 as its critical triple bottom support and it was also its 52-week low. The Markets breached this levels twice and yesterday it has closed below this critical support but have stayed within its filter. The Markets are very near to being oversold. Also, the Global Markets were oversold much before this and they have been witnessing a technical pullback. Though this does not have direct technical relevance but the temporary buoyant global markets will have some sentimental effect and we could also see some mild technical pullbacks. Today’s expected positive opening will see the Markets opening around or little above 7540 levels and it would be critically important to see the behaviour of the Markets vis-à-vis the levels of 7540.

All and all, it remains important to note that even if we see technical pullback and see the Markets pulling back a percent or a percent and a half, it would remain a mere technical pullback. The overall structure as of today continues to remain weak and therefore, every up move that we see should be utilized to protect profits.  We continue to advise to keep purchases heavily stock specific and selective while continuing to maintain 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 12, 2016

Daily Market Trend Guide -- Tuesday, January 12, 2016

MARKET REPORT                                                                             January 12, 2016
The Markets made a fresh 52-week low today while it opened with a gap down and later ended the day with modest losses while recovering from the low point of the day. The Markets saw a gap down opening following global weakness and worsened Chinese sentiments and opened below the triple bottom support and 52-week low of 7540. The Markets made its intraday low of 7494.35 in the morning trade while it traded in a capped range. The morning trade saw the Markets making some feeble attempts to recover but continued to resist to 7540 on its way up. It traded sideways in the afternoon trade while continuing to resist to the levels of 7540 which it broke. However, the second half saw the Markets attempting a rebound once again. It went past this level and went on further to form the day’s high of 7605.10. It came off a bit from those levels and finally ended the day at 7563.85, posting a modest loss of 37.50 points or 0.49% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, JANUARY 12, 2016
Though the Markets survived the scare of the breaching its triple bottom on the Daily Charts yesterday at Close levels, it is still not completely out of the woods. Today’s analysis continues to remain more or less on similar lines as we can expect a quiet and modestly negative start to the Markets. Once again, the levels of 7540 will continue to remain critically important and it would be necessary for the Markets to defend this level and remain above 7540 in order to avoid further weakness.

For today, the levels of 7590 and 7625 will act as immediate resistance levels for the Markets. Supports come in at 7540 and 7470 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.1213 and it does not show any failure swing. However, the NIFTY has formed a fresh 14-period low but RSI has not yet and this is Bullish Divergence. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY January series have added over 3.50 lakh shares or 1.62% in Open Interest. The NIFTY PCR stands at 0.81 as against 0.82. Though this figure of net OI addition clearly suggest that there has been discomfort with shorts at lower levels, this figure has also appeared with net selling in Cash segment by the FIIs.

Coming to pattern analysis, the Markets breached the levels of 7540 yesterday. This level is an important major triple bottom pattern support and also the 52-week low for the Markets. By breaching this level, the Markets formed its fresh 52-week low yesterday of 7494. However, it is critically important to note that this breach was an intraday breach and the Markets have managed to close above this. Therefore, this level of 7540 continues to remain an important level to watch and it would be of paramount importance for the Markets to keep its head above this level to avoid further weakness from creeping in.

All and all, the Markets continue to oscillate around 7540 levels but for immediate short term we have some chances of the technical pullback. However, even with the technical pullback, the Markets will continue to remain in the current intermediate downtrend. Therefore, it is advised to make purchases but on a very limited and selective basis while avoiding shorts for the immediate short term. 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