Friday, May 13, 2016

Daily Market Trend Guide -- Friday, May 13, 2016

MARKET TREND FOR FRIDAY, MAY 13, 2016
Today’s Market analysis remains more or less on similar lines that of yesterday. Today, following weak CPI and IIP data will cause the Markets to continue to remain in consolidation phase. Today, we can expect the Markets to open on a lower note and once again test levels around the 200-DMA of the Markets which stand at 7819. The behavior of the Markets in the zones of 7820-7850 will be critical to watch out for. However, if the Markets consolidate and maintain levels above 200-DMA, it would be healthy for the Markets in the long run.


Today, the levels of 7940 and 7975 will act as immediate resistance levels for the Markets. The supports come in at 7820 and 7775 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.27, and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it trades below its signal line. However, it continues to inch towards reporting a positive crossover in coming days.

On the derivative front, the NIFTY May futures have added over 3.23 lakh shares or 1.94% in Open Interest. This remains a healthy sign as the Markets have went on to add fresh long 
positions in the Markets.

Coming to pattern analysis, the Markets have so far maintained itself above 200-DMA levels. So long as they maintain themselves above 200-DMA, it will continue to consolidate in a broad trading range of 200-DMA on the lower side and the upper intermediate resistance levels of 7970-7990. The Markets, in the immediate short term will continue to consolidate in this broad 170-odd points trading range. Any slip below the 200-DMA will induce some short term weakness in the Markets. However, this remains less likely and the Markets will see themselves oscillating in this broad trading range.

All and all, the approach of the Markets is likely to remain bottom up as fundamentally screened and technically strong stocks and sectors are likely to see selective purchases and out performance. Overall, we continue to reiterate our view on selective buying while maintaining strong vigil at every rise while avoiding shorts at any levels. Overall, cautious optimism should be continued in the Markets.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331




Thursday, May 12, 2016

Daily Market Trend Guide -- Thursday, May 12, 2016

MARKET TREND FOR THURSDAY, MAY 12, 2016
The Markets survived a Mauritian Treaty scare as it traded precisely on expected lines. Post gap down opening, at one point of time, it recovered its losses entirely and ended with modest losses. Today, we can expect the Markets to open on a flat to modestly negative note and look for direction. The Markets are expected to remain under consolidation with 200-DMA acting as support and this would be purely on technical grounds.


For today, the levels of 7890 and 7925 will act as immediate resistance levels for the Markets. The supports come in at 7820 and then at 7750 levels.

The RSI – Relative Strength Index on the Daily Chart is 56.11 and it continues to remain neutral without showing any bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line. However, it is moving towards reporting a positive crossover.

On the derivative front, the NIFTY May futures have shed over 17.63 lakh shares or 9.54% in Open Interest. This figure is significant by any means and it shows heavy short covering from lower levels. The NIFTY PCR stands at 0.92, unchanged from its previous levels.

While having a look at Pattern Analysis, the Markets have its intermediate top / resistance levels at 7970-7990 zones. Unless that is cleared, we are not likely to see any sustainable fresh rally on the upside. However, even without this breakout, the overall trading range of the Markets remains much wide and this will see the Markets moving in a large band with the levels of 200-DMA acting as support and the levels of 7970-7990 acting as resistance. This translates into trading range of nearly 170-odd points and this means that will also see quite good amount of volatility remaining ingrained in it.

The Markets shall also react to the YOY Inflation rate and March IIP numbers coming in later today. The Markets will also react to that in coming sessions as well. Today, we can see the Markets moving in a capped range and we will witness the stock specific out-performance and very select purchases taking place. While avoiding shorts, such selective purchases may be made while remaining vigilant enough to protect profits at higher levels.


Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331

Wednesday, May 11, 2016

Daily Market Trend Guide -- Wednesday, May 11, 2016

MARKET TREND FOR WEDNESDAY, MAY 11, 2016
The otherwise stable Markets will react to the amendments in the Mauritian treaty which affects the GAAR and this will see the Markets opening on a gap down note. The Markets will see itself opening well below its 200-DMA opening with the expected opening levels and this will send the Markets once gain in a consolidation phase. It is very important to note at this point that this reaction of the Markets is likely to be knee-jerk affair in the immediate short term and the Markets are likely to be bought into with any dip.


For today, the levels of 7920 and 7970 are immediate resistance levels for the Markets. The supports come in at 7810 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.34 and it remains neutral as it shows no bullish or bearish divergence. The Daily MACD stays bearish as it trades below its signal line. However, if the Markets remain ranged, it might report positive crossover in coming days.

On the derivative front, the NIFTY May futures have added over 2.64 lakh shares or 1.45% in open interest. The Markets have been adding open interest with every rise over last couple of days indicating addition in long positions.

Coming to pattern analysis, the Markets have inched above 200-DMA and yesterday after a modestly negative opening took support near its 200-DMA to move up again. The logical zone of resistance for the Markets would be 7970-7990 range and a fresh rally would occur only after the Markets move past these levels. Having said this, the Markets will react to the amendments in the Mauritian treaty and this will have its knee-jerk reaction in the immediate short term. However, it becomes important to note that though the Markets will are all likely to see themselves opening below the 200-DMA level which is 7827 today, there will be no structural breach on the Daily Charts. There are also bright chances that any price shock will be bought into and such gap downs are all likely to be utilized as buying opportunities.

All and all, gap down opening expected following developments on the Mauritian treaty front but the price shocks are likely to be utilized as sudden buying opportunities given the overall fundamentals of the Indian Markets. It is best advised to refrain from creating aggressive shorts and in fact make very selective and moderate purchases with every downside that is witnessed. Liquidity should be maintained while continuing to maintain a overall cautious outlook on the Markets.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331



Tuesday, May 10, 2016

Daily Market Trend Guide -- Tuesday, May 10, 2016

MARKET TREND FOR TUESDAY, MAY 10, 2016
Markets showed a robust up move yesterday and moved past its 200-DMA by a notch and ended near the high point of the day. Today, some amount of subdued opening can be expected and the Markets are once again likely to consolidate around its 200-DMA, which is 7830 today. The overall structure of the Markets is bullish and the support zones of 7670-7720 have hold good with the upper resistance levels remaining at 200-DMA and further near 7970 levels. The overall upward momentum within this broad range is likely to remain in the immediate short term.


For today, the levels of 7900 and 7970 will act as immediate resistance levels for the Markets. The supports come in at 7830 and then at 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.0870 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it still trades below its signal line.

On the derivative front, the NIFTY May futures have added over 6.09 lakh shares or 3.46% in Open Interest. The increase in Open Interest coming in with a up move clearly signifies addition of fresh long positions in the Markets.

Coming to pattern analysis, the Markets have established its existing range by first resisting multiple times near 7970 levels and then taking support for multiple time near its falling trend line pattern support  around 7680 levels drawn from 8600 levels. The NIFTY has been oscillating in this broad trading range for past many days. In the meantime, it has crisscrossed its 200-DMA and it is attempting to move past that level. So long as the Markets are able to move past and stay above its 200-DMA, which is 7830 today, it will remain and trade with upward bias. Having said this, the resistance around 7970 levels remain and the Markets are likely to face resistance in that zone. However, with a tepid start expected today, the Markets are likely to see some consolidation around the 200-DMA.

Overall, the Markets are likely to see some consolidation around 200-DMA and until this happens we are also likely to see some sectoral performance shifts in the Markets. We might see some Energy, Bank, IT and Pharma stocks outperforming the overall Markets. However, this out-performance, irrespective of the sector will remain highly stock specific. So long as the Markets maintains above 200-DMA very selective purchases may be made maintaining cautious optimism in the Markets.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331



Monday, May 9, 2016

Daily Market Trend Guide -- Monday, May 09, 2016

MARKET TREND FOR MONDAY, MAY 09, 2016
The Markets are expected to open on a modestly positive note and we can expect some stability to return o the Markets. On Friday, the Markets took support from near the falling trend line which it had moved past in April. We can fairly expect the Markets to remain in a trading range with support of 7670 levels and upper resistance of its 200-DMA which stands at 7833 today. The Markets are likely to oscillate between this trading range. However, sustainable of possible positive opening would be critical and the intraday trajectory that the Markets form would be critical to watch out for.


For today, the levels of 7770 and 7820 would act as immediate resistance levels for the Markets. Supports come in at 7670 and 7620 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.2620 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD stays bearish as it trades below its signal line. On the Candles, a bullish hammer is seen and this shows potential of the Markets stabilizing in the immediate short term. However, this requires confirmation today. On the Weekly Charts, the Weekly RSI is 50.5874 and this too remains neutral with no bullish or bearish divergence or any failure swings. The Weekly MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY May futures have shed another 6.44 lakh shares or 3.53% in Open Interest. NIFTY has been consistently shedding OI since last couple of days.

Coming to pattern analysis, the Markets have breached its 200-DMA after oscillating in a 140-odd points range for a couple of days. On its way down, the Markets have taken support 
on a falling trend line which is drawn from 8600 levels. This was a pattern resistance that the Markets breached on its upside. On the Weekly Chart as well, the Markets have taken  support on a similar falling trendline pattern support. On the Daily Chart, the Markets have seen its 50-DMA cutting 100-DMA from below reporting a positive crossover. This may see some short term upside momentum in the Markets.

All and all, all given and said, there are fair chances of the Markets seeing some stability. This being said, the Markets still continues to remain in a no-trade zone. There will be no sustainable up move until the Markets breach its 200-DMA again in a comprehensive manner and stays above that. Though it will continue to oscillate in a given range with a difficult direction bias. Stock specific activities and purchases are likely to be seen with the profits being protected vigilantly at higher levels.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331