Friday, July 22, 2016

Daily Market Trend Guide -- Friday, July 22, 2016

MARKET TREND FOR FRIDAY, JULY 22, 2016
The levels of 8595 levels continued to remain sacrosanct as the Markets continued to consolidate and did not break out above 8595-8610 levels yesterday while it ended the day with modest losses. The Markets have been consolidating heavily and today is likely to remain no different. With the levels of 8595 continuing to remain an immediate top for the Markets, we can fairly expect the Markets to open on a flat to mildly positive note and continue to consolidate. The levels mentioned will continue to remain immediate top and resistance for the Markets.

For today, the levels of 8595 and 8625 will continue to act as immediate resistance levels for the Markets. The supports come in at 8475 and 8410 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.2304 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it continues to trade above its signal line. However, it is moving towards reporting a negative crossover. On Candles, an engulfing bearish pattern has occurred. When this appears                 during an uptrend which appears to be the case with NIFTY, this can mark a potential top for the Markets.

On the derivative front, the NIFTY July futures have over 3.92 lakh shares or 1.67% in Open Interest. This shows that some amount of long unwinding has happened in the yesterday’s session.

Coming to pattern analysis, as mentioned often in our previous editions, the Markets have been consolidating after it broke on the upside above 8295 levels. In last week, the Markets have been consolidating after it marked the level of 8595 as its immediate high. This level has been acting as immediate top for some time for the Markets. It is very much expected that the Markets will take some time before it gives yet another runaway rally and this level will continue to mark an immediate top for the Markets.

All and all, no significant up move shall occur until the Markets moves past the levels of 8595-8610. However, given the reading of the lead indicators along with F&O data, it appears that it would be some time before the Markets gives a fresh break out and in immediate short term, we might continue to see the Markets consolidating. However, such consolidation will happen in a range and while the Markets continue to display good amount of inherent strength, volatility will continue to remain ingrained in the session. Overall, cautious outlook is advised for the day.


Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331

Thursday, July 21, 2016

Daily Market Trend Guide -- Thursday, July 21, 2016

MARKET TREND FOR THURSDAY, JULY 21, 2016
The Markets have attempted to resume its up move by moving towards upper end of its consolidation band yesterday as it ended the day with modest gains. However, it has not yet shown any break-out from that narrow consolidation zone and it continues to remain within that. Today, we can expect the Markets to open on a flat note and continue to consolidate with the levels of 8600 and 8625 continuing to act as immediate resistance levels. The Markets are nearly overbought once again and any sharp up move will make it overbought again.

Today, the levels of 8600 and 8625 will act as immediate resistance levels for the Markets. The supports come in at 8515 and 8470 levels.

The RSI—Relative Strength Index on the Daily Chart is 69.4113 and it does not show any failure swing. However, NIFTY has formed a fresh 14-day high but RSI has not and this is Bearish Divergence. The Daily MACD stays bullish as it continues to trade above its signal line.

On the derivative front, NIFTY July futures have added yet another over 6.21 lakh shares or 2.71% in Open Interest. This makes it very much evident that we have seen fresh long positions being initiated once again in this segment.

Coming to pattern analysis, the Markets have continued to show up move but it has remained within the narrow range in which it has been consolidating. The Markets have been consolidating with the levels of 8600-8610 acting as resistance on the upper side. With the Markets tracking the rising trend line of the channel it has formed from February lows, any fresh up moves or attempts to break out of the consolidation zone will see the Markets testing its logical targets of 8630-8645 levels. However, it will be overbought once again and it would be a while before we see a longer sustainable rally even if the undercurrent remains buoyant.

Taking into account that the lead indicators have shown very mild signs of weariness again, the Markets may show up moves but will continue to remain vulnerable to sharp selling bouts as it has been in the past. Before a fresh sustainable breakout is seen, we will continue to see some good amount of volatility remaining ingrained in the Markets. We continue to reiterate to avoid major shorts positions, preserve cash and keep fresh purchases highly stock specific.

Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331




Wednesday, July 20, 2016

Daily Market Trend Guide -- Wednesday, July 20, 2016

MARKET TREND FOR WEDNESDAY, JULY 20, 2016
Markets displayed great amount of volatility and strength as well as it see-sawed nearly 100-odd points intraday to finally end with modest gains. Today, Markets are expected to see a flat to modestly positive opening and look for directions. It is most likely that the Markets will continue to consolidate and some amount of volatility will continue to remain ingrained and therefore, it keeps analysis for today once again on similar lines like yesterday.

The levels of 8575 and 8625 will act as immediate resistance levels for the Markets today. The supports come in at 8475 and 8430 levels.

The RSI—Relative Strength Index on the Daily Chart is 67.4335 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it continues to trade above its signal line.

On the derivative front, the NIFTY July futures have added over  5.19 lakh shares or 2.32%  in Open Interest. The NIFTY PCR stands at 1.03 as against 1.06 yesterday.

Coming to pattern analysis, the Markets have been consolidating after it moved upwards post breaking out above 8295 levels. It has been seeing a range bound consolidation since last couple of days but at the same time, the Markets have displayed good amount of resilience at higher levels. The levels of 8600-8610 have now become a intermediate top for the Markets and fresh rally would occur only after the Markets move past these levels. Until this happens, we will see the Markets oscillating in a capped range. However, the downsides would be limited as inherent strength continues to remain intact.

Overall, the underlying buoyancy in the Markets remains intact. The Markets may not see a runaway rally immediately but the resilience will continue to show and the downsides would be limited. In form of corrections, we might witness some limited downsides and volatile intraday movements. While refraining from shorts all downsides should be utilized to make selective purchases as sector rotation is much evident in the Markets and stock specific out-performance will continue.


Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331

Tuesday, July 19, 2016

Daily Market Trend Guide -- Tuesday, July 19, 2016

MARKET TREND FOR TUESDAY, JULY 19, 2016
Markets traded precisely on analyzed lines as it gave up at its intraday high, witnessed a selling bout from higher levels and consolidated to end with minor losses. We continue to keep our analysis for today on similar lines. Markets are expected to see a quiet to modestly positive opening and will look for directions. It is very much likely that the yesterday’s high has now become an immediate top for the Markets and the Markets will continue to consolidate while maintaining this level as its intermediate top.

For today, the levels of 8585 and 8595 will act as immediate resistance levels for the Markets. The supports come in much lower at 8460 and 8410 levels.

The RSI—Relative Strength Index on the Daily Chart is 66.3587 it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it continues to trade above its signal line. On the Candles, a big black candle has occurred. Since this has occurred near a resistance area after a good amount of up move, this has added credibility to the overhead resistance for the Markets.

On the derivative front, the NIFTY July futures have shed over 1.39 lakh shares or 0.62% in Open Interest. This shows some unwinding from higher levels in the Markets.

Coming to pattern analysis, as mentioned often in our previous editions, the Markets have put on significant gains after breaking out above its previous top of 8295 levels. Post that, it has consolidated in between for a couple of days and it is now tracking the upper line of the upward rising channel that it has formed from its February lows. Having said this, though it trades comfortable within this rising channel, it had got overbought and some amount of consolidation was imminent. The Markets have shown signs of fatigue in previous two sessions and yesterday, it witnessed a selling bout from higher levels to end with minor losses. With today’s modestly positive opening expected, we can fairly expect the Markets to consolidate once again at higher levels.

As we keep our reading for the Markets on similar lines, even with the positive opening expected, the levels of 8595-8600 levels will continue to act as immediate resistance levels for the Markets. Since the Markets have continued to display great amount of inherent strength, shorts should be avoided but the up moves should be utilized to protect profits at higher levels and any downsides should be used to make quality purchases as sectoral rotation continues in the Markets.


Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331

Monday, July 18, 2016

Daily Market Trend Guide -- Monday, July 18, 2016

MARKET TREND FOR MONDAY, JULY 18, 2016
The Markets consolidated on Friday after it retraced from the opening highs of the day to end the day with mild losses while remaining in range bound trajectory. Today’s analysis continues to remain on similar lines. The Markets are expected to see a quiet to positive opening and it is very much likely to see itself consolidating in a capped range while continuing to display inherent strength and buoyancy. It is likely to test its upper rising trend line resistance and it is also likely that the Markets continue to face corrective pressure at higher levels.

The levels of 8590 and 8625 will act as immediate resistance levels for today. The supports come in at 8510 and 8475 levels.

The RSI—Relative strength Index on the Daily Chart is 69.8871 and it has just crossed below a topping formation. It does not show any bullish or bearish divergence or failure swings. The Daily MACD stays bullish as it trades above its signal line.

On the derivative front, the NIFTY July futures have further added over 4.58 lakh shares or 2.08% in Open Interest. The NIFTY PCR stands at 1.06 as against 108 on Friday.

Coming to pattern analysis, the Markets have been displaying great amount of strength post its breakout from 8295 levels. After each rise, what we have been witnessing are just intraday corrective bouts and a range bound consolidation. The Markets continues to remain in a upward rising channel drawn from the February lows and it is expected that if the Markets continue to keep tracking its upward rising trend line, then the logical targets of 8600-8625 cannot be ruled out. However, at any given point of time, the Markets will continue to remain vulnerable to intraday selling bouts or ranged consolidation at higher levels.

Overall, the Markets have been driven by a tactical shift towards equity following sharp decline in bond yields abroad. Given the technical structure of the Charts, the Markets continue to remain vulnerable to selling bouts at higher levels but it continues to remain inherently strong and buoyant. Any decline should be used to make quality purchases. Sector specific out performance shall continue. Shorts should be avoided and cautious optimism is advised or today.


Milan Vaishnav, CMT
Technical Analyst

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

+91-98250-16331