Saturday, March 11, 2017

MARKET TREND FOR FRIDAY, MARCH 10, 2017

MARKET TREND FOR FRIDAY, MARCH 10, 2017
Domestic Equity Markets put up a buoyant show ahead of the Election outcome as the benchmark NIFTY50 saw sharp recovery in the last 90-minutes of the trade to end yet another day on a flat note gaining 2.70 points or 0.03%. It is important to note that the Markets have been consolidating near the Double Top resistance levels for nearly a week now. It is very much clear that given the importance of the currently election on the present set of on-going reforms and its acting as a precursor to the 2019 elections, the NIFTY has virtually de-coupled and posed very strong resilience to the sharp spike in the US Bond Yields and has also so far digested the fact of the nearly-imminent interest rate hike on March 15th. Today, we expect a positive opening to the Markets and expect some decisive moves on the future momentum of the Markets. Even if the Market discounts, we cannot discount the extended week-end and given the election results, some amount of caution might also creep in leading to some volatility as well.

For today, the levels of 8950 and 9035 will remain potential resistance levels for the Markets. The supports come in at 8835 and 8770 levels.

The Relative Strength Index – RSI on the Daily Chart is 63.7532 and it remains neutral and shows no failure swings or any divergence as against the price. The Daily MACD remains bearish trading below the signal line but the trajectory has flattened and a positive crossover is expected if the NIFTY maintains its present ground. No significant formations are seen on Candles.

The NIFTY March futures have further went on to add over 5.88 lakh shares or 2.65% in Open Interest. This very clearly indicates a bullish set up as the addition has come in while the NIFTY recovered from the low point of the day.

The pattern analysis indicates bullish inclination of the Markets. After testing the Double Top resistance zone of 8930-8950 zones, the NIFTY has been deliberating around these levels in a capped range for nearly a week now. This, if read singularly, indicates  buoyant set up as instead of correction and showing some retracement, the NIFTY is moving sideways and forming a congestion zone, which usually translates into continuation of the present trend. A decisive up move shall occur if the NIFTY manages to move past and close above 8960-levels comprehensively.

Overall, much of the set-up in the Markets revolves around expectations and not actual results of the Election,  and such set-ups can often act as double edged sword. The way the NIFTY has till now showed exemplary resilience to global technical factors like sharp spike in the US Bond yields and has digested the near imminent rate hike in the US on March 15th, any slightest of the negative outcome on the domestic front  may see the Markets reacting more-than-necessary leading very volatile knee-jerk reactions. Given such fact, we have to live with the present buoyant set up and can expect the buoyancy to continue next week. 
However, throwing caution to the wind is not advised and remaining cautiously optimistic is something that 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



+91-98250-16331 

MARKET TREND FOR THURSDAY, MARCH 09, 2017

MARKET TREND FOR THURSDAY, MARCH 09, 2017
The Indian Equities ended the day with a modest loss of 22.60 points or 0.25% but this was not before the benchmark NIFTY50 recovered from its intraday lows after witnessing good amount of volatility in the morning trade. Today, we expect a modestly negative opening and the intraday trajectory that the NIFTY forms will remain critically important. The Markets have placed itself at a very critical juncture and we have to, therefore, look at couple of important points that may heavily dominate the market moves in coming days. With each passing day that Markets consolidate near its crucial Double Top Resistance area, it is showing high amount of underlying strength. Also, with the outcome of the UP Elections around the corner, more eyes in the Markets will watch that than ever before and slightest sniff of the favorable outcome for BJP will led great impetus to the on-going reforms and also give a great sentimental boost to the Markets. On the other hand, we cannot ignore a spike the US Bond yield as it goes on to expect the interest rate hike on March 15th.

Today, the levels of 8950 and 9035 will continue to act as resistance levels for the Markets. The supports come in at 8835 and 8780 levels.

The Relative Strength Index on the Daily Chart is 63.5429 and this has reached its lowest value in last 14-days. The RSI has set a fresh 14-period low while NIFTY has not and this has resulted into Bearish Divergence. The Daily MACD stays bearish while trading below its signal line. No significant formations are observed on Candles.

The NIFTY March Futures have added over 3.17 lakh shares or 1.45% in Open Interest. This goes on to point towards likely continuation of upward momentum in the Markets.

While having a look at pattern analysis, it now becomes more than evident that the NIFTY has marked the 8950-8960 area as its major Double Top resistance. In other words, meaningful up move shall occur only after the NIFTY moves pas these levels and closes above it. Until this happens, we will continue to see the NIFTY oscillating in a broad range and remaining vulnerable to profit taking bouts.

Overall, two things remain extremely important to take notice of. First, undoubtedly, the level of caution will heighten as a precaution to the polls outcome will increase. Even though it is evident that the Market are showing strong undercurrents, caution is likely to prevail as the Markets brace the extended weekend. Secondly, despite the strong undercurrents, it would be unwise to think that the NIFTY will decouple itself with other global technical inputs. The spike in US Bond yield will certainly remain a concern. We reiterate to remain extremely light on the positions and avoid significant exposure on either side. Cash should be preserved while adopting a cautious outlook 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



+91-98250-16331 

MARKET TREND FOR WEDNESDAY, MARCH 08, 2017

MARKET TREND FOR WEDNESDAY, MARCH 08, 2017
The Indian Equity Markets headed nowhere as the benchmark NIFTY50 consolidated very much on expected lines as it ended the day posting minor loss of 16.55 points or 0.18%. The NIFTY has shown no retracement after approaching a Double Top resistance levels and has continued to display good amount of underlying strength. Today, we expect a modest start to the Markets and also expect range bound consolidation to continue. We will see NIFTY oscillating in a defined range and the levels of 8940-8960 acting as major pattern area resistance at Close levels. Though NIFTY will continue attempt its march towards 9000-mark and higher, this is not likely to remain without intermittent profit taking bouts.

For today, 8960 and 9035 will act as likely resistance levels for the Markets. The supports come in at 8910 and 8815 levels.

The Relative Strength Index – RSI on the Daily Chart is 66.5433 and it does not show any failure swings and any bullish or bearish divergence. The Daily MACD is bearish as it trades below its signal line. On candles, no significant formations are seen.

The NIFTY March futures have added over 2.27 lakh shares or 1.05% in Open Interest. This continues to portray underlying strength in the Markets.

Coming to pattern analysis, the NIFTY has so far continued to resist the Double Top resistance area of the 8940-8950 levels and has continued to do so until now. As mentioned often in our previous notes, any significant up move shall occur only after the NIFTY moves past these levels and closes above it. Until that happens, we will see sessions remaining dominated with range bound movements coupled with some volatility.

All and all, the NIFTY has formed a broad congestion zone and it is likely to continue to consolidate in that zone. This is likely to occur in a form of a range bound movement. At the same time, since the NIFTY is yet to move past the 8950-mark at Close levels, NIFTY will continue to remain vulnerable to profit taking bouts at higher levels. The lead indicators do not indicate any significant weakness coming in and downsides, if any, will remain limited. While continuing to pick select stocks with each lower level, positive caution is advised for 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



+91-98250-16331 

MARKET TREND FOR TUESDAY, MARCH 07, 2017

MARKET TREND FOR TUESDAY, MARCH 07, 2017
The Markets ended the day on a strong note after a tepid start and ended the session on Monday near the high point of the day posting gains of 65.90 points or 0.74%. The Charts indicate that this up trend is likely to continue and after ending at the fresh 2-year highs, the NIFTY will try and continue to extend its gains, though with some intermittent range bound oscillations. Today, we expect a modest start to the session and as we go ahead, we expect the NIFTY to march towards 9000-mark. However, beyond this, the NIFTY is again expected to spend some time in consolidation and intermittent bouts of profit taking cannot be ruled out near the 9000-mark. The Markets are showing very strong upward bias and momentum and it is also very much supported by the F&O data. Again, a run-away rise beyond this level is not expected.

For today, the levels of 8995 and 9030 will act as likely resistance levels and the supports will come in at 8890 and 8810 levels.

The Relative Strength Index – R SI on the Daily Chart is 68.7508 and it shows no failure swings. The NIFTY has set a fresh 14-period high but the RSI has not yet and this has resulted into Bearish Divergence on this oscillator. The Daily MACD is still bearish as it trades below its signal line. A Rising Window has occurred on the Candles. This is a gap and it usually implies continuation of the prevailing uptrend.

The NIFTY March futures have added 84,075 shares or 0.39% in Open Interest. This indicates minor addition of fresh longs to the system.

The pattern analysis shows the NIFTY oscillating in a capped range after marking a Double Top on the Daily Charts. The levels of 8950 continue to remain a Double Top resistance area. The NIFTY has moved past this level and has ended a notch above that but it still remains within its filter. However, the buoyant undercurrents displayed by the Market makes is very likely that after spending a brief time around these levels, we will see the 
NIFTY attempting to test higher levels.

All and all, we expect the Markets to remain strong and display strong momentum on the upside. The lead indicators are exhibiting some fatigue but this will at the most cause some intermittent profit taking bouts but the downsides are likely to remain relatively much limited. We reiterate our recommendation to refrain from creating major short positions and continue to utilize corrective dips in making fresh purchases.

Milan Vaishnav, CMT 

Technical Analyst 
(Research Analyst, SEBI Reg. No. INH000003341)

Member
Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA



+91-98250-16331 

MARKET TREND FOR MONDAY, MARCH 06, 2017

MARKET TREND FOR MONDAY, MARCH 06, 2017
The Markets on Friday remained subdued for the most part of the session but the second half of the trade saw the benchmark NIFTY50 coming off its lows and finally ended the day on a flat note losing 2.20 points or 0.02%. The discomfort at the lower levels was evident as the pullback was on account of short covering from the low point of the day. Speaking purely on the technical note, since the Markets ended the previous session coming off its lows, we can expect the Monday’s session to start on a modestly positive note. We no other headwinds, the NIFTY is most likely to continue with its up move in the initial trade but broadly speaking the consolidation is likely to continue but with a positive bias. The levels of 8950 will continue to remain a major pattern area resistance at Close levels.

For today, the 8950 and 8990 will act as immediate resistance levels. The supports will come in at 8835 and 8770 levels.

The Relative Strength Index – RSI on the Daily Chart is 64.3820 and it shows no failure swings. It also does not show any divergence against the price. The Daily MACD is bearish as it still continues to trade below its signal line but the trajectory is flattened. The Candles do not show any major formation on the Daily Charts.

The NIFTY March futures have shed over 5.85 lakh shares or 2.65% in Open Interest. The fact that the NIFTY saw sharp recovery in the second half of the session and this coming with decline in OI shows that the pullback was because of short covering from lower levels.

The Pattern Analysis has confirmed the 8930-8950 zones as a Double Top resistance area on the Daily Charts. For any meaningful up move to occur, NIFTY will have to move past and close above this area. Until this happens, we will continue to see broad based consolidation continuing in the Markets. The Bollinger Bands are 37.71% narrower than normal but this does not singularly suggest anything significant.

All and all, the NIFTY has continued to display buoyant undercurrents. The fact that we saw short covering from the lower levels on Friday displays discomfort of market participants at lower levels. However, this needs to be replaced with fresh longs in coming days. Overall, while completely avoiding shorts we recommend select stock picking at lower levels. Overall, positively cautious outlook is advised for 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



+91-98250-16331