Friday, October 14, 2016

Daily Market Trend Guide -- Friday, October 14, 2016

MARKET TREND FOR FRIDAY, OCTOBER 14, 2016
Domestic equity markets traded very much on expected lines as weak technicals forced a lower opening and the Markets ended with a deep cut showing a clear downward breach from the current Descending Triangle formation. Today, we can expect a stable opening but overall, in coming days, it would not be a surprise if the Markets test its 100-DMA as it would also complete measuring implications of the current pattern on the Daily Charts. On the upside, the level of 8690 will now act as formidable resistance in event of any pullbacks.

For today, the levels of 8620 and 8645 will act as immediate resistance levels and the supports will come in at 8540 and 8485 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.8437 and it has reached its lowest value in last 14-days which is Bearish. It does not show any bullish or any bearish divergence. The Daily MACD stays bearish as it trades below its signal line. On the Candles, a falling window occurred. This is a gap and a big candle that occurred in this formation established the credibility of the downward breach from the current support level.

On the derivative front, the NIFTY October futures have shed over 14.36 lakh shares or 6.77% in Open Interest indicating good amount of unwinding of long positions. The NIFTY PCR now stands significantly below 1.

Coming to pattern analysis, the NIFTY was in a small Descending Triangle formation over couple of days. The neckline support was at 8690 which also coincided with the 50-DMA. In yesterday’s session the NIFTY has given a sharp downward breach from this bearish formation. Going by the measuring implications, it would be no surprise if the Markets tests its 100-DMA which would act as a major support at Close levels.

Overall, there might be some technical pullback but in that case, the level of 8690 will act as formidable resistance to any up move. It would be important to note that stock specific performance will remain the highlight of the session and this will continue as the Markets will individually reward good stocks who would report good numbers. Apart from this, the negative bias is expected to continue. It is advised to keep overall exposure to moderate levels while maintaining highly cautious outlook on the Markets.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA

http://milan-vaishnav.blogspot.com


+91-98250-16331 

Wednesday, October 12, 2016

Daily Market Trend Guide -- Thursday, October 13, 2016

MARKET TREND FOR THURSDAY, OCTOBER 13, 2016
In our Weekly Note and in our Monday’s edition, we had expected the session to be one with shallow activities and that day the domestic equity markets ended the day with minor gains while hanging on precariously to the critical support level of 8690. Today, the Markets will open after two days of holidays and will have some catch-up to do with weak global markets. Speaking purely on technical terms once again, this may cause a modestly negative opening to NIFTY and once again, the level of 8690 will remain critical level to watch for.

For today, the levels of 8725 and 8760 will act as immediate resistance levels and the supports will come in at 8690 and 8620 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.7340 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY October futures have shed over 1.76 lakh shares or 0.82% in Open Interest. This signifies modest continuation of offloading / unwinding of long positions.

Coming to pattern analysis, the NIFTY has continued to remain in a Descending Triangle formation and it is now moving towards its apex. The more a security price moves towards its apex during such formation, greater are the chances of any such formation failing. In the given case, the 50-DMA which is 8708 and the neckline levels of 8690 will be the critical levels to watch for and any breach below these levels will see more weakness in the Markets.

Overall, if NIFTY is able to trade above 8710, i.e. above the 50-DMA and the neckline levels, it will continue to remain in the current formation. However, any drip below 8690 will induce more weakness in the Markets. The domestic markets may witness some alignment to global markets and this may see some negative bias and choppiness remaining ingrained. While remaining very modest on the overall exposure, cautious approach is advised for the day.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA

http://milan-vaishnav.blogspot.com


+91-98250-16331 

Monday, October 10, 2016

Daily Market Trend Guide -- Monday, October 10, 2016

MARKET TREND FOR MONDAY, OCTOBER 10, 2016
The domestic equity markets on Friday traded win a capped range and ended with minor losses but overall, the NIFTY continues to precariously hang around its critical support levels of 8690. Today, we may see a modestly stable opening but speaking purely on technical terms, the levels of 8690 remains critical to watch out for. In any case, this would be a truncated one with just 3 working days with Tuesday and Wednesday being holidays on account of Dussera and Mohharam respectively.

Today, the levels of 8710 and 8775 will act as immediate resistance levels for the Markets. The supports come in at 8690 and 8620 levels.

The RSI—Relative Strength Index on the Daily Charts is 47.8404 and it remains neutral showing no bullish or bearish divergence or any failure swings. The Daily MACD trades bearish below its signal line. On the Weekly Charts, the Weekly RSI is 60.4125 and this too remains neutral without showing any bullish or bearish divergences. The Weekly MACD has reported a negative crossover and it now bearish as it trades below its signal line.

On the derivative front, the NIFTY October futures have 6.72 lakh shares or 3.04% in Open Interest.

While having a look at pattern analysis, the NIFTY evidently continues to struggle while taking support at the neckline levels of descending triangle formation which is 8690. The 50-DMA of NIFTY stands at 8706 and it has closed a notch below this but trades within its filter. On the Weekly Charts, the lead indicators have began to show signs of weariness and some possibility of downside correction cannot be ruled out if the NIFTY breaches the levels of 8690 comprehensively. On the upper side, the 8800-8850 zones continue to pose formidable resistance to the Markets.

Overall, we might see shallow activities in the Markets this being a very short week and caution with a negative bias will continue to prevail. Some sector rotation will be seen and we will see outperformance from select Midcaps. Overall, to avoid any further weakness, the NIFTY will have to defend 8690 levels and in event of any up moves, selling pressure from higher levels cannot be ruled out.

Milan Vaishnav, CMT
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Association of Technical Market Analysts, (ATMA), INDIA

http://milan-vaishnav.blogspot.com


+91-98250-16331