Friday, February 26, 2016

Daily Market Trend Guide -- Friday, February 26, 2016

MARKET REPORT                                                                                February 26, 2016
Though the Markets ended with losses for the third day in a row, the session remained relatively less volatile given the expiry day today. The Markets saw a quiet opening, much on expected lines. After opening flat, the Markets slipped into negative for a brief time in the morning trade. However, it crawled back into green soon after that. It spent the morning session trading with minor gains while it formed its intraday high of 7034.50 while remaining in overall very capped and sideways trajectory. In the second half, the Markets saw some paring of gains once again. It slipped back into negative and kept making fresh gradual lows. By late afternoon trade, the markets went on to from the day’s low of 6964.10. It finally ended the day at 6970.60, posting a net loss of 48.10 points or 0.69% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, February 26, 2016
Going strictly by numerical sense, the Markets had a fresh 52-week low on Closing Levels as it ended the day couple of points below its previous low. However, the Markets have attempted to take a support on the minor Double Bottom Formation. Today, we are likely to see a decently positive opening in the Markets and the Markets are expected to trade in positive at least in the initial trade. The Markets will also react to the Economic Survey coming out later today and the maintaining the possible positive opening would be important.
For today, the levels of 7034 and 7090 will act as immediate resistance levels for the Markets.  The supports come in at 6960 and 6870 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.3237 and it does not show any failure swings. The NIFTY has made a fresh 14-day low but RSI has not yet and this is Bullish Divergence. The Daily MACD as reported a negative crossover and it now trades below its signal line.

On the derivative front, the March futures have begun with adding Open Interest of 44.91 lakh shares or 31.69%. The NIFTY PCR stands at 0.88.

Coming to pattern analysis, the Markets, as of yesterday have continued to remain in a broad trading range that it has formed between 6900 and 7240 levels. On the Closing charts, the Markets have attempted to take support on a minor double bottom formation and it is likely that it would validate that support. On the bar charts as well, though the intraday low remains lower, the Markets are within the overall broad range that is mentioned above. Having said this, today’s expected positive opening is likely to keep the Markets in that given broad range. It would be important to see that the Markets are able to maintain the expected positive gains. Any Close below the current close levels will increase the chances of the Markets testing its intraday 52-week lows.

Overall, the Markets continue to place themselves at a critical juncture wherein it is nearly mandatory to have a positive Close and keep itself in the broad trading range. Any loss at the Close levels will induce further temporary weakness in the Markets. With the current levels near its short term supports, we advise to refrain from creating any fresh shorts. Any longs, at the same time, should be protected 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, February 25, 2016

Daily Market Trend Guide -- Thursday, February 25, 2016

MARKET REPORT                                                                               February 25, 2016
Markets opened negative and ended yet another day with losses as caution weighed high ahead of Union Budget due to come up on Monday. The Markets witnessed a negative opening. It opened bit worse than expected but spent the morning trade moving in sideways trajectory with limited losses. Though it lost some more ground, the afternoon trade saw an attempt to recover as the Markets managed to recoup some of its losses. When at one point when the Markets traded with only marginal losses, the second half of the trade did most of the undoing for the Markets. The Markets started to lose ground on accelerated note and went on to form the day’s low of 7009.75. No recovery was seen and the Markets finally settled the day at 7018.70, posting a net loss of 90.85 points or 1.28% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, FEBRUARY 25, 2016
Markets are likely to see a flat opening once again and look for directions. It poises itself at critical juncture as today remain a expiry day of current February series. At the same time, it faces three important events as well. Railway Budget comes up later in the day today, Economic Survey tomorrow and Union Budget on Monday. The technical structure shows throws mixed indications as though they wear a moderately bearish undertone, at the same time, they are unlikely to make fresh 52-week lows until there is some drastically wrong with Budget proposals.

For today, the levels of 7075 and 7120 are immediate resistance levels for the Markets. The supports come in at 6990 and 6930 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.9588 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD still remains bullish as it trades above its signal line.

On the derivative front, NIFTY has reported 55% rollovers so far. The February series shed over 29.80 lakh shares or 20.80% in Open Interest whereas the March series added over 39.56 lakh shares or 38.73% in Open Interest. The NIFTY PCR stands at 0.68 as against 0.75 yesterday.

Coming to pattern analysis, in lines with what we mentioned often in our previous editions, the Markets have reacted sharply from 7240 levels. These levels are now continuing to act as resistance as it was the support that the Markets breached on the downside. Having said this, the Markets are unlikely to breach the levels of 6869, the 52-week lows that it has formed couple of sessions back. The reasons are manifold. First, the volumes have declined; second, the PCR stands at one of the lowest levels in recent times indication of unwinding of decrease in overall Put positions. However, in event of three major events that the Markets face, the Markets are expected to hold 6869 levels as support on the downside unless something goes wrong drastically with the Union Budget proposals.

Overall, all is certainly not well with the Markets are the Markets have shown no signs of confirmation of any formation of the bottom so far. At the same time, a look solely at the technicals of the Markets suggests less possibilities of making fresh bottoms. However, at the same time good amount of volatility will remain ingrained in the Markets as the Markets will have a lot to reach to the events coming up in next three days. We continue to reiterate to refrain from any significant exposures and adopt highly 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, February 24, 2016

Daily Market Trend Guide -- Wednesday, February 24, 2016

MARKET REPORT                                                                                    February 24, 2016
The Markets had a thoroughly disappointing session as the levels of 7240 remained stiff resistance for the Markets as it corrected and ended the day with losses. The Markets saw a modestly negative opening. It opened below the critical levels of 7240 and it recorded its intraday high of 7241.70 in the early minutes of the trade. After remaining very briefly into positive, the Markets slipped in the negative territory. It remained in downward falling trajectory for rest of the session and kept making gradual lows. It weakened a bit more in the final hour of the trade forming the day’s low of 7090.70, slipping over 150-odd points from the high point of the day. It finally settled the day at 7109.55, posting a net loss of 125 points or 1.73% while forming a similar top but sharply lower bottom on the Daily Bar Charts.


MARKET TREND FOR WEDNESDAY, FEBRUARY 24, 2016
The Markets are likely to open on a flat note and look for directions. There are chances that we see stability returning to the Markets and the Markets may limit its downside, at least in the initial trade. We enter the penultimate day of the expiry of the current derivative series and for today and tomorrow, we will see the Markets remain dominated with rollover centric activities. Also, we will see the Markets remain heavily cautious ahead of Union Budget on Monday.

The levels of 7145 and 7190 will act as immediate resistance levels for the Markets. The supports come in at 7065 and 7020 levels.

The RSI—Relative Strength Index on the Daily Chart is 40.22442 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bullish as it trades above its signal line.

On the derivative front, the NIFTY February series have shed over 42.78 lakh shares or 22.99% in Open Interest. The March series added over 39.44 lakh shares or 62.90% in Open Interest. The NIFTY PCR stands at 0.73 as against 0.78.

As mentioned in our previous editions of the Daily Market Trend Guide, the Markets have been resisting multiple times to the levels of 7240. The primary reason being that this level is the support that the Markets breached while it formed its low of 6869. So, this level – 7240—will act as resistance while the Markets give a technical pullback. The pattern analysis very clearly suggests that though the bottom has been formed at 6869, as of now, this remains a near term bottom. However, in any case, the Markets have not confirmed any kind of reversal from these levels. In absence of any reversals and its confirmation, the Markets will continue to oscillate in a broad range as it has been doing in couple of previous sessions.

Overall, the Markets are also likely to remain ingrained with some amount of volatility as well. The expiry week as well as caution and adjustments before the Union Budget will add to the volatility that the Markets will witness. Also, with no bottom being formed, the oscillation in a broad range is also likely to remain somewhat volatile as well. Overall, we continue to reiterate to keep purchases limited and maintain adequate liquidity in the Markets while continuing with cautious outlook 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

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


Tuesday, February 23, 2016

Daily Market Trend Guide -- Tuesday, February 23, 2016

MARKET REPORT                                                                              February 23, 2016
The session yesterday remained quite stable as the Markets ended the day with marginal gains while displaying strength and continuing to consolidate. The Markets saw a flat and quiet opening as the Markets opened slightly in the red while it formed is intraday low of 7200.70 in the early minutes of the morning trade. The Markets soon crawled back into the positive territory but continued to trade in a much capped range. For the major part of the session, it continued to consolidate but at the same time, continued to fiercely resist to the 7240 levels. It was in the second half that the Markets managed to rise bit more while forming the day’s high of 7252.40. However, the zone of 7240 continued to act as resistance and the Markets came off a bit from those levels. It finally ended the day at 7234.55, posting minor gains of 23.80 points or 0.33% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, February 23, 2016
Analysis for today continues to remain on similar lines that of yesterday. The Markets continued to resist to the levels of 7240 yesterday for nearly entire session. Today as well, we can fairly expect the Markets to open on a flat note and continue to consolidate in the initial trade while the levels of 7240 will continue to act as immediate resistance for the Markets.

For today, the levels of 7240 and 7285 will act as immediate resistance levels for the Markets. The supports come in at 7180 and 7135 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.3427 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD has turned bullish as it now trades above its signal line. We have mentioned in previous two editions about MACD moving towards positive crossover.

On the derivative front, rollovers were seen as the NIFTY February series have shed over 19.41 lakh shares or 9.45% in Open Interest whereas the March series added over 16.69 lakh shares or 36.28% in Open Interest.

If we have a look at pattern analysis, the Markets over previous days have been trading quite on the dotted lines. In line what was analyzed, the Markets have been resisting to the 7200-7240 zone. This levels were the support that the Markets broke on the downside while it formed its low of 6869. In the technical pullback that was witnessed thereafter, these levels have been acting as the resistance levels for the Markets. It becomes important to note that the Markets have been displaying strength while it is consolidating around these levels and there are chances that the Markets moves past these levels. If it does so, the next logical levels it could test are 7450-7525 range but they will still continue to remain in falling trajectory as such.

All and all, the Markets have been displaying strength and may move past the immediate resistance levels of 7240. It becomes important to note, however, that the Markets have shown some divergence from global markets while performing and even if its moves past 7240, it can test higher levels but will continue to remain in overall downward trajectory. It is advised to make selective purchases and use any up moves in protecting profits at higher levels. Positive optimism 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