Daily Market Trend Guide -- Tuesday, September 15, 2015

MARKET REPORT                                                                                 September 15, 2015

The Markets continued with its pullback yesterday as well and it did so in a relative stable session as it ended the day with decent gains. Though much of the pullback witnessed yesterday was purely on account of short covering. The Markets saw a quiet opening but soon dipped into the red in the morning trade while it formed its intraday low of 7791.85. The Markets then slowly crawled back in to positive territory by late morning trade. After trading with modest gains in sideways trajectory until afternoon, the Markets saw some more strength coming in as it surged up and remained in upward rising trajectory until the end. The Markets went on to form the day’s high of 7879.95 in late afternoon trade and was able to maintain those gains. Not much volatility was witnessed throughout the session and the Markets finally ended the day at 7872.85, posting a decent gain of 82.95 points or 1.06% while forming a slightly higher top but similar bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 15, 2015

Markets are likely to open on a flat to mildly negative note and look for directions. Today’s analysis remains more or less on similar lines like yesterday. The reason being, the up move that we witnessed has been due to more or short covering and therefore with each higher levels, the Markets continue to remain vulnerable from selling bouts. Even if we witness some better opening and the Markets inches upwards, it will still continue to trade below its key resistance zones.

For today, the levels of 7890 and 7940 will act as immediate resistance levels. The supports come in much lower at 7880 and 7820 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.7551 and it has reached its highest value in last 14-days which is bullish. The RSI has set a fresh 14-day high while NIFTY has not yet and this is bullish divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY September futures have shed over 3.47 lakh shares or over 1.53% in Open Interest. This clearly indicates that short covering took place yesterday. The NIFTY PCR stands at 0.94 as against 0.93 yesterday.

Coming to pattern analysis, the Markets are attempting to form base but have shown no signs of confirmation so far. Even as the lead indicators suggest, it may continue to inch upwards but the up moves shall be more or short covering than any fresh buying. The absence of fresh buying and lower volumes that we have been seeing with continue to keep the Markets vulnerable to sell offs from higher levels. Also, as of now the Markets continues to trade below its key resistance zones of 7960-8000 levels. As the Markets approaches these levels, the likelihood of the Markets facing resistance at these levels also increases.

All and all, the Markets might continue to inch upwards and post some more modest gains but all of these up moves should be utilized more to book profits on positions taken at lower levels. Fresh buying should be kept very restricted until the Markets show some directional bias and shows some confirmation of finding its base. Until this happens, highly cautious approach with conservation of cash is advised.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91-98250-16331
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