Friday, November 4, 2016

Daily Market Trend Guide -- Friday, November 04, 2016

MARKET TREND FOR  FRIDAY, NOVEMBER 04, 2016
The Markets had a lackluster session as it gave up in the last hour of the trade to end the day with minor losses. Today as well, the NIFTY continues to hang in precarious balance. Yesterday, the NIFTY ended up taking support at the lower line (return line) of the falling channel that it has formed. Having said this, today, we can expect a lower opening and this is all likely to cause the NIFTY to open outside the falling channel raising possibilities of a downward break down. However, it would be important to see if the NIFTY improves as the day progresses and comes back inside the trading range of the falling channel.

For today, the levels of 8520 and 8555 will act as immediate resistance levels for the day. The supports come in at 8450 and 8420 levels on the downside.

The RSI—Relative Strength Index on the Daily Chart is 35.4053 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed yet another over 1.72 lakh shares or 1% in Open Interest. The NIFTY PCR stands at 0.93 as against 0.95.

Coming to pattern analysis, the NIFTY has taken support as of now on the lower line (return line) of the falling channel that it has formed from 8968 levels. Any breach of this return line will cause the NIFTY to get weaker in the near term. Today’s likely lower opening will see the Markets opening outside this falling channel and this obviously is a reason to worry for the Markets. It would be critically important to see if there is some improvement as the day progresses in the second half of the session and the NIFTY crawls back into the trading range.

All and all, we sound high levels of caution in the Markets today. It is advised to refrain from taking any fresh positions at any side and maintain liquidity to hold and protect existing positions. At any levels, wherever possible, exposures should be curtailed. The reaction to the European Markets too will be important to watch in the second half. The NIFTY will also react to the GST rates that got finalized yesterday. Overall, very cautious outlook is advised on the Markets today.

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 

Thursday, November 3, 2016

Daily Market Trend Guide -- Thursday, November 03, 2016

MARKET TREND FOR THURSDAY, NOVEMBER 03, 2016
After a gap down opening yesterday, the NIFTY ended the day with a deep cut and showed no signs of recovery during the day while it moved in a 35-odd points range in sideways trajectory. Today, we can expect a subdued opening in the Markets but at the same time, we can expect some attempts by the Markets to find some stability as it rests at a important short term pattern support. However, it rules below the 100-DMA levels and therefore the level of 8567 will remain critically important to watch out for.

For today, the levels of 8567 and 8620 will act as important resistance while the supports come in at 8485 and 8450 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.2195 and it does not show any failure swings. The NIFTY has formed a fresh 14-period low but RSI has not and this shows Bullish Divergence. The Daily MACD stays bearish as it trades below its signal line. A falling Window occurred on Candles. This is a gap and this can have bearish implications. However this needs confirmation.

On the derivative front, the NIFTY November futures have 1.54 lakh shares or 0.89% in Open Interest. This figure is not significantly higher and there has been no large scale offloading / unwinding that was visible in the Markets yesterday.

Coming to pattern analysis, the NIFTY continues to remain in a falling channel formation drawn from 8968 levels. Yesterday, it opened, remained and closed below 100-DMA level which is 8567 today. It is important to note that the NIFTY currently stays within the filter of this 100-DMA and also rests at important short term pattern support. This shows that there are some chances that the NIFTY attempts to find some base and stabilize at current levels. However, to do it, it is critically important for the NIFTY to pullback and trade above 100-DMA levels to avoid further weakness.

All and all, NIFTY is currently not at all out of woods as yet and so long as it rules below 100-DMA levels, it will continue to remain vulnerable sell-offs and volatile movements. In the current scenario, we maintain our view to approach Markets with elevated levels of caution. Shorts should be avoided and downsides should be utilized to make very selective purchases. We will see sectoral out performance from IT and select MidCap stocks. While remaining relatively light on overall exposures, cautious optimism 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

+91-98250-16331 / +91- 70164-32277



Wednesday, November 2, 2016

Daily Market Trend Guide -- Wednesday, November 02, 2016

MARKET TREND FOR WEDNESDAY, NOVEMBER 02, 2016
NIFTY ended flat yesterday after coming off from its intraday highs in the last hour and half of the trade making evident the quantum of caution that we had highlighted in our yesterday’s edition. Today, we are likely to see a weak opening following weakness in the global markets. Today’s opening is likely to test the 100-DMA of the NIFTY. There are all chances that we see opening lower than 100-DMA, however, some resilience and improvement from lower levels as the day progresses cannot be ruled out.

While the levels of 8645 and 8675 will act as immediate resistance levels, the levels of 8565 and 8510 will act as important supports.

The RSI—Relative Strength Index on the Daily Chart is 45.6039 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed over 3.88 lakh shares or 2.19%in Open Interest. Offloading of long positions at higher levels was evident. The NIFTY PCR stands at 0.97 as against 0.99.

Coming to pattern analysis, the NIFTY continued to resist to the upper line of the falling channel that it has formed from 8968 levels. With the falling nature of this trend line, the resistance level too keep reducing and therefore the levels of 8970 and then the 50-DMA above it remain a sacrosanct resistance for the Markets. Given the  potential lower opening today, the NIFTY will go on to test its 100-DMA and probably levels below that. If the NIFTY closes below 100-DMA, it will send the NIFTY into more intermediate weakness in the near term.

All and all, with the lower opening very much likely, the behavior vis-à-vis the levels of 100-DMA will be critical to watch out for. NIFTY is likely to show some resilience at levels below 100-DMA but in any case, it will require to trade above 100-DMA as early as it can to avoid any serious weakness from creeping in. We advice to refrain from major shorts at lower levels as some improvement near or from below 100-DMA cannot be ruled out. Volatility will remain ingrained in the session. Cautious view while remaining very light on overall exposure 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

+91-98250-16331 / +91- 70164-32277



Tuesday, November 1, 2016

Daily Market Trend Guide -- Monday, November 01, 2016

MARKET TREND FOR TUESDAY, NOVEMBER 01, 2016
On the Mahurut session on Sunday, the NIFTY ended the day with modest losses while it continued to resist to the upper line of the falling channel formed from the 8968 levels. Though, today, the NIFTY will have some adjustments to do with global Markets while it opens, we can expect a modest start to the Markets. The 8680 and the 50-DMA will continue to remain the critical levels to watch out for.

For today, the levels of 8680 and 8710 will act as immediate resistance levels for the NIFTY. The supports come in at 8620 and 8560 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.5481 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 56.3901 and this too remains neutral as it shows no bullish or bearish divergence or any failure swings. The 
Weekly MACD too is bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have 25,650 shares or nominal 0.14% in Open Interest.

While having a look at pattern analysis, it remains evident that the NIFTY continues to remain trapped in a falling channel that got initiated after the NIFTY formed the high of 8968. Having said this, during previous sessions, the upper end of the falling channel has continued to act as resistance for the NIFTY. Given the obvious falling nature of such trend line, the resistance levels too keep coming down with each passing day. This pattern resistance, and 8710, which is the 50-DMA for the Markets will continue to pose immediate resistance to the NIFTY. Until the NIFTY moves past these levels and closes above it, we do not see any attempt to reverse the current intermediate trend.

All and all, today as well, we might expect a range bound movement with the 50-DMA acting as major pattern resistance at Close levels. On the way down, the levels of 100-DMA would be critical to watch out for. Apart from this, we will continue to see a volatile environment and until any significant signs appear showing the NIFTY attempting to reverse its current trend, we will continue to remain vulnerable to sell-offs at higher levels. We reiterate to adopt a highly cautious view 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