Thursday, September 18, 2014
MARKET REPORT September 18, 2014
Buoyed by the FOMC outcome wherein it indicated that the interest rates would be kept at current levels for “considerable time” and with China pledging funds today, the Markets took this as a sentiment booster and saw a very strong pullback after two days of losses. The Markets opened expectedly on a lower note and formed its intraday low of 7939.70 in very early minutes of the trade. In the morning trade, the Markets saw itself slowly recovering from lower levels. However, beginning the late morning trade and rest of the session after that the Markets saw a sharp up move and kept adding gains. The Markets remained very buoyant and saw no signs of any kind of selling pressure at higher levels. It rose some nearly 175+ points from lows of the day as it went on to form the day’s high of 8120.85. This level was maintained and the Markets finally ended the day at 8114.76, posting a robust gain of 139.25 points or 1.75% while forming a sharply higher top and bottom on the Daily Bar Charts.
MARKET TREND FOR FRIDAY, SEPTEMBER 19, 2014
After a strong pullback, the Markets have left itself at a very critical juncture as evident from the Daily Charts. Tomorrow’s opening, and the behaviour of the Markets vis-à-vis the range of 8125-8150 would be crucial to see if the Markets attempt to breakout again or remain in consolidation mode. The opening is expected to be modestly positive but the overall trading trajectory of the Markets will remain very important and face an acid test.
The levels of 8140 and 8180 would act as immediate resistance and the supports come in much lower at 7930 and 7870 levels.
The RSI—Relative Strength Index on the Daily Chart is 60.8258 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.
On the derivative front, NIFTY September futures did see some fresh long positions as it added over 9.53 lakh shares or 7.54% in Open Interest.
Looking at the structure of the charts, as mentioned earlier, the Markets have still ended within the range seen on the Charts. Its opening and behaviour vis-à-vis the levels of 8120-8150 would be critically important. In order to breakout again, the Markets will have to trade above these levels. Failure to do so will bring the Markets once again in the consolidation zone.
Overall, with some initial positive movement expected, selective purchases can be made. Sectoral and stock specific out performance would also be seen. However, there are chances of some profit taking returning at higher levels and therefore, positions and profits should be protected at higher levels. Overall cautious optimism is advised.
Consulting Technical Analyst,
Wednesday, September 17, 2014
MARKET REPORT September 17, 2014
The Markets had a volatile session and it moved in either direction before settling with modest gains after two days of losses. The Markets saw a strong opening, and proceeded to form its day’s low of 7990.65 but soon pared all of its gains subsequently to trade nearly flat. Though quite good amount of volatility was witnessed in the trade it never really dipped into the negative. The Markets then spent the rest of the session in a capped and narrow range. It did never attempted to move upwards nor did it break down on the downside. After spending the session in this manner, the Markets finally ended the day at 7975.50, posting a modest gain of 42.60 points or 0.54% while forming a lower top and slightly higher bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, SEPTEMBER 18, 2014
Speaking purely on technical terms, the Markets have just halted its decline and there are chances that the weakness might continue to persist for some more time. Expect the Markets to open on a quiet note but at the same time, there are chances that it continues to bear negative bias and any rise may counter some more profit booking at higher levels. Possibilities of testing the level of 50-DMA cannot be ruled out.
The levels of 8045 and 8070 are expected to act as resistance. The supports would come in at 7820 and 7775 levels.
The RSI—Relative Strength Index on the Daily Chart is 51.4293 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line. On the Candles, A Bullish Harami has occurred. When such pattern is observed during a uptrend, as in case of NIFTY, this bullish harami pattern is considered bearish and signals potential continuance of the corrective activity.
On the derivative front, NIFTY September futures have shed yet another 2.82 lakh shares or 2.19% of Open Interest. This clearly indicates that profit taking and unwinding of positions have continued in the Markets.
Returning to pattern analysis, the Markets have formed a immediate top and have returned within the broadening formation. This implies bearish repercussions as such formations appear while formation of a major top. There are chances that the Markets may see pullbacks but these are likely to remain in overall downward bias of the Markets.
Overall, it is clear that any uptrend that the Markets will now see are likely to remain short lived and might be encountered with selling pressure from higher levels. Any purchases should be kept limited to non-index components and defensives. This should be done selectively and only if such sectoral indices are not overbought or have given sell signals. While maintaining much vigil, cautious approach should be continued.
Consulting Technical Analyst,
Tuesday, September 16, 2014
MARKET REPORT September 16, 2014
The Markets traded precisely on expected lines as it saw a serious correction setting in and ended the day with deep slice. Following weak technicals, the Markets opened on a negative note and traded with capped losses in the first half of the trade. However, after the morning session, the Markets saw some selling pressure coming in. This pressure got intensified in the second half of the session as the Markets rapidly lost ground. It went on to form the day’s low of 7925.15 towards the end of the session. Such selling pressure persisted and the Markets showed no signs of recovery at all at any point of time. The Markets, while showing no signs of recovery, ended the day at 7932.90, with a deep cut of 109.10 points or 1.36% while forming a sharply lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, SEPTEMBER 17, 2014
The failure of the breakout from the rising trend upper trend line has been completely validated. Technically speaking, the Markets are likely to open on a weaker note and have bright chances to continue with its downward trajectory. If such trend persists, there are chances that the its goes on to test the 50-dma levels.
The levels of 8040 and 8190 would act as immediate resistance whereas the levels of 7860 and 7815 would act as support.
The RSI—Relative Strength Index on the Daily Chart is 47.8778. Though it does not show any bullish or bearish divergence, it has reached its lowest value in last 14-days which is bearish. The Daily MACD confirms it negative crossover and is bearish while it trades below its signal line.
On the derivative front, the NIFTY September further have continued to shed 5.29 lakh shares or 3.93% in Open Interest. This makes one thing very evident that the decline in Markets is direct result of unwinding of positions and pure selling.
Going by the pattern analysis, it is very much evident that the broadening formation that we have been mentioned over last couple of occasion has persisted and the Markets have failed to break out of that. The attempt to breakout has proved to be a false signal or a whipsaw and the Markets are back inside that broadening formation with a negative bias.
All and all, we continue to reiterate to exercise caution in the Markets. Even if the Markets see a minor pullback, it is likely to remain very short lived as the bias certainly remains on the downside. Any further weakness would have the Markets test its 50-DMA levels. Even if the Markets consolidate a bit the chances of it continuing with the downward trend is likely for the immediate short term. Overall, caution is advised in the Markets.
Consulting Technical Analyst,
Monday, September 15, 2014
MARKET REPORT September 15, 2014
The Markets corrected in today’s session, quite on expected lines on lines of weak IIP numbers that came in on Friday and on equally unfavourable technical indicators. The Markets saw a near gap down opening as it opened a notch lower but spent most of the session in a very narrow and capped range. The Markets did not drift much lower during the day but at the same time did not made any attempt to recover from lower levels as well. While continuing to trade sideways, it formed a day’s low of 8030 in the late afternoon trade. As mentioned, once again no major recovery from lower levels was seen and the Markets finally ended the day at 8042, posting a net loss of 63.50 points or 0.78% while forming a distinctly lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR TUESDAY, SEPTEMBER 16, 2014
The Markets have conformed one thing as of now that the breakout it had attempted has not been validated and it has bought itself back into the broad channel that it has formed. Tomorrow, we can expect to see a mildly negative opening again. Technically speaking, the Markets should continue with its downward drift. However, even in case of any small pullback, it would continue within the broad channel and would continue to resist to the rising line.
The levels of 8100 and 8130 would act as immediate resistance and the levels of 7960 and 7910 would act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 57.9557 and it has reached its lowest value in last 14-days which is bearish. Further, the RSI has formed a fresh 14-period low whereas NIFTY has not yet and this is clear bearish divergence. The Daily MACD has reported a negative crossover as precisely predicted in our previous editions and it now trades below its signal line which is bearish indication.
On the derivative front, NIFTY September futures have went on to shed yet another 2.43 lakh shares or 1.78% in Open Interest. This signifies that that there has been continuance of unwinding of positions or profit taking and no fresh shorts have been created.
Going back to pattern analysis, the Markets have failed to confirm a breakout. Its movement past the rising trend line of the broad channel has proved to be a false signal or a whipsaw and with today’s close, it is back again in the broadening channel. As of now, the levels of 8180 has become a immediate top for the Markets and no runaway rise would occur until the Markets moves past this level.
Overall, the advisory remains more or less on similar lines like that of yesterday. We continue to reiterate to refrain from making major purchases but to keep them very much selective in stock specific and non-index components. Though sectoral out performance would continue, it is best advised to keep overall leverage under control. Cautious outlook is advised for the day.
Consulting Technical Analyst,