Friday, March 11, 2016

Daily Market Trend Guide -- Friday, March 11, 2016

MARKET REPORT                                                                                   March 11, 2016
Though the Markets recovered from the lows of the day, it still ended the day with modest losses and remained in corrective mode very much on expected lines. The Markets saw a modestly positive opening and it formed its intraday high of 7547.10 in the early seconds of the trade. The Markets did not get a less-than-expected positive opening and after that it soon pared its opening gains to trade in negative territory. It continued to drift as it remained in falling trajectory and by afternoon, it formed its intraday low of 7447.40, paring some 100-odd points from the opening highs. The second half, though, saw some recovery coming in. The Markets managed to recover more than half of its losses. It finally settled the day at 7486.15, posting a net loss of 45.65 points or 0.61% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, March 11, 2016
The equity markets would react to the ECB decision on rates taken yesterday. Having said this, the Markets have resisted to its important resistance level of 7550 and this level will continue to pose resistance to the Markets in the immediate future. Today, we can expect a quiet opening in the Markets and if the weakness persists, then the levels of 50-DMA, i.e. 7396 is expected to act as support at Close levels.

The levels of 7525 and 7550 will act as immediate resistance levels for the Markets today. The supports come in at 7440 and 7395 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.6246 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 its signal line.

On the derivative front, the NIFTY March futures have shed over 8.02 lakh shares or 3.55% in Open Interest. This indicates that some unwinding of long positions took place yesterday.

Coming to pattern analysis, the Markets have resisted to the levels of 7550 as it did not clear this level after multiple attempts while it consolidate over previous couple of days. It becomes important to note that this level is the triple bottom of the descending triangle that the Markets breached on the downside and therefore this level is posing a major resistance while the Markets are attempting a rebound. This level will continue to pose resistance in the immediate future and fresh up move shall occur only after the Markets moves past this level.

Overall, some amount of weakness is likely to persist unless the equity markets react positively to the quantitative easing by the ECB. In any case, the levels of 7550 will continue to pose resistance to the Markets. As mentioned earlier, the levels of 50-DMA is expected to act as support in event of any weakness. It is advised to keep exposures at moderate levels while maintaining a cautious outlook on the Markets.

Milan Vaishnav,
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
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, March 10, 2016

Daily Market Trend Guide -- Thursday, March 10, 2016

MARKET REPORT                                                                                  March 10, 2016
Markets continued to display strength as it opened on a lower note but recouped all of its losses during the day to end the day with modest gains. The Markets saw a modestly negative opening but after trading with limited losses in the initial trade, lost further ground in the late morning trade. It formed its intraday low of 7424.30 in the morning trade and recovered a bit to trade with modest losses. The Markets trade was spent trading with modest losses but the Markets then attempted a rebound. Gradually, by afternoon trade, it recouped all of its losses to trade flat. The second half saw the Markets extending its recovery decently. It went on to trade in the positive and further went on to form the day’s high of 7539. It continued to resist to the 7530-50 zone. While deliberating around these levels, it finally ended the day at 7531.80, posting a modest gain of 46.50 points or 0.62% while forming a slightly higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, MARCH 10, 2016
The Markets faces a critical test of 7550 levels today. Given the global stability, we are likely to see a modestly positive opening today. However, this likely positive opening is likely to cause the Markets to open around its major resistance levels of 7550 and it would be critically important to see how the Markets deals with that zone. The intraday trajectory that the Markets form would be crucial to watch out for. There are faint chances that some amount of profit taking, though just intraday, may be seen from these levels.

For today, the levels of 7550 and 7595 will act as important resistance levels for the Markets. The supports come in lower at 7424 and 7405 levels.

The RSI—Relative Strength Index on the Daily Chart is 61.3047 it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The MACD remains bullish as it continues to trade above its signal line. On the Candles, and Engulfing Bullish line has occurred. Though this is a bullish formation, it indicates a short term top for the Markets when it occurs during an uptrend. However, this always remains indicative and requires confirmation on the following day.

On the derivative front, the NIFTY March futures have shed over 4.12 lakh shares or 1.79% in Open Interest. This indicates some amount of short covering form lower levels.

While having a look at pattern analysis, two things were observed yesterday. While the Markets were in corrective mode in the initial trade, it did take support around its 50-DMA on expected lines. Further, while it recovered, it resisted around its important resistance zone of 7530-7550 levels. It is important to know that the 7550 levels were the triple bottom support for the Markets which the Markets broke on its way down. So, on its way up, these levels are likely to act as important resistance zone. If the Markets manages to move past these levels, the next logical targets should be around its 100-DMA. However, before the Markets moves past these levels, some amount of consolidation with minor bouts of profit taking cannot be ruled out.

Overall, as mentioned, while some amount of profit taking bouts cannot be ruled out, the overall undercurrent continues to remain buoyant. Given this fact, while avoiding shorts emphasis should be continued on protecting profits at higher levels. Selective purchases too can be made but in moderate quantities. Overall, positive caution is advised for today.


Milan Vaishnav,
Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331

Wednesday, March 9, 2016

Daily Market Trend Guide -- Wednesday, March 09, 2016

MARKET REPORT                                                                                    March 09, 2016
Markets traded very much on the dotted lines while it consolidated for the second day while respecting its resistance zone of 7530-7550 levels. The Markets saw a very quiet and flat opening and after this, it slowly crawled further into the positive territory to trade with modest gains. While forming its day’s high of 7527.15 in the morning trade, the Markets slowly started to retrace its gains. By the first half of the session, the Markets had come off from its intraday highs to trade flat once again. It slide further into the negative territory and went on to form the day’s low of 7442.15 coming off nearly 80-odd points from the high point of the day. This way, it spent most part of the session trading in a falling trajectory. However, the last hour and half of trade saw some recovery coming in. The Markets managed to recoup most of its losses and it finally settled the day at 7485.30, posting a flat close with net loss of just 0.05 points while forming a higher top but similar bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 09, 2016
Today’s analysis continues to remain once again on similar lines that of yesterday. The Markets are expected to open on a flat to modestly negative note and look for directions. They are likely to continue to consolidate and the levels of 50-DMA will continue to act as important support at Close levels.  The intraday trajectory that the Markets form will be important to watch out for and the Markets will have to remain above 50-DMA levels in order to avoid any weakness from creeping in.

Today, the levels of 7525 and 7550 will continue to act as resistance for the Markets. Supports exist at 7440 and 7410 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.5558 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 March futures have added over 7.74 lakh shares or 3.49% in Open Interest. This very clearly suggest buoyant undercurrent in the Markets. The NIFTY PCR continues to stand unchanged at 0.994.

While having a look at pattern analysis, the Markets have continued to consolidate for the third day in a row. This signifies underlying strength in the Markets as of now that after a major pullback of over 10%, the Markets have shown no signs of profit taking or selling from higher levels. Instead, it has consolidated in a very narrow range. Such behavior, if continued, often results into the continuation of current trend. However, the levels of 7525-7550 will have to be watched as these are the levels that the Markets breached on the downside and they are now acting as resistance. The Markets can see significant upsides if it manages to move past 7550. However, before that happens, it is very much likely that it continues to consolidate for some more time. In the process, the 50-DMA is expected to act as support at Close levels.

All and all, we continue to reiterate our yesterday’s reading of the Markets. Moderate purchases may be continued to be made but more emphasis should be laid on protecting profits at higher levels. Shorts should be avoided as the Markets are currently consolidating. Overall, while keeping tight eye on liquidity and existing profits, if any, cautious but positive 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

+91-98250-16331

Tuesday, March 8, 2016

Daily Market Trend Guide -- Tuesday, March 08, 2016

MARKET REPORT                                                                                      March 08, 2016
Markets continued to show strength as it consolidated on Friday while it ended the day with minor gains. The Markets saw a positive opening and saw its intraday high of 7505.90 in the very early moments of the trade. The Markets, thereafter, soon lost grounds rapidly and forming its intraday low of 7444.10 in the morning trade. While forming the day’s range in the morning trade, the Markets spent the rest of the entire session in a very limited and capped range. It traded in the both positive and negative side but did not make any runaway rise. It did not show any weakness or signs of any profit taking either. After spending the session in a narrow 40-odd points range, the Markets finally settled the day at 7485.35, posting a nominal gain of 9.75 points or 0.13% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, MARCH 08, 2016
The Markets shall open today after a long weekend as the Markets were closed yesterday on account of Mahashivratri. Today, the Markets are likely to open on a quiet to modestly negative note and are likely to consolidate. While the Markets consolidate after nearly 10% pullback post Union Budget, the 50-DMA is likely to act as important support for the Markets.

The levels of 7505 and 7550 are now major resistance levels for the Markets. The supports come in at 7445 and 7420 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.5585 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 is bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 45.8838 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD is bearish as it still trades below its signal line.

On the derivative front, the NIFTY March futures have added 8.99 lakh shares or 4.22% in Open Interest. The NIFTY PCR stands unchanged at 0.99.

While having a look at pattern analysis, the Markets have displayed good amount of strength even after a massive pullback of 10%. While taking support at its recent 52-week lows, the Markets displayed a sharp pullback and even managed to move past its important resistance levels of 7240. While doing so, the Markets also moved past its 50-DMA levels which stand at 7420 today. The underlying strength in the Markets is evident as it showed no signs of profit taking on Monday and in fact consolidated in a given capped range. Today, the Markets are likely to continue to consolidate and while it consolidates, the level of 50-DMA is likely to act as support at Close levels.

All and all, the lead indicators and technical structure on the Charts confirm the underlying strength in the Markets as of now. However, some amount of consolidation and profit taking cannot be ruled out. If the Markets witness a runaway rise, it is likely to face major resistance at around 7550 levels. Given this likelihood, it is advised to again have a very selective approach while making fresh purchases and lay more emphasis on protecting profits at higher levels. However, shorts should be strictly avoided at under currents in the Markets continue to remain strong.

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