Daily Market Trend Guide -- Tuesday, November 10, 2015

MARKET REPORT                                                                      November 10, 2015

While trading precisely as analyzed, the Markets survived the Bihar scare as it ended with just modest losses after a serious gap down opening. The Markets saw more than 150-odd point’s gap down opening as the sentiment took a serious drawdown following thrashing of the NDA in Bihar polls. However, post such gap down opening, the Markets formed its intraday low of 7771.70 in the very early minutes of the trade. Soon after this, the Markets spent nearly entire session recovering from the lows. The Markets recovered somewhat in the morning trade itself and then traded sideways in the afternoon. Some more recovery came in the second half and at one point of time the Markets managed to recover most of its losses. It formed its intraday high point of 7937.75 while recovering nearly 160 points from its lowest point. It finally settled the day at 7915.20, posting a modest loss of 39.10 points or 0.49% while forming a lower top and sharply lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, NOVEMBER 10, 2015

The Markets today are likely to continue to feel some aftershocks and that would keep the analysis more or less on similar lines that of yesterday. The Markets are likely to open once again on a lower note but not like yesterday. Though a negative opening is expected, it is once again likely that the Markets sees some recovery or stability going ahead in the session given the overall structure on the technical charts as well as some F&O data. However, some choppiness is likely to remain ingrained in the Markets and volumes will tend to remain on lower side as well.

For today, the levels of 7950 and 7990 will act as immediate resistance for the Markets. The supports come in at 7850 and 7775 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.5881 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 continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed over7.39 lakh shares or 3.96% in Open Interest. This very clearly indicates that shorts were covered on a large scale pose gap down opening yesterday. The NIFTY PCR stands lowest in recent times at 0.77 as against 0.83 yesterday.

Coming to pattern analysis, the Markets have made a severe and sharp breach of the pattern support in the form of rising trend line as evident from the Daily Chart. This level, on its way up, will continue to act as a short term resistance. Today, though some lower opening is expected, it continues to pose some chances just like yesterday for the Markets to recover as it goes ahead in the session. The F&O data suggests massive short covering yesterday and it suggests somewhat clear discomfort of the shorts at lower levels in the Markets. Even if the Markets sees fresh shorts getting built up and sees some downward pressure, such downsides seem to be limited as such.

Overall, the Markets may see somewhat lower opening today as well but it is advised to now refrain from creating any fresh shorts. Given the overall structure and the F&O data, the downsides seem limited and any dips should be continued to be used for making quality and selective purchases. However, in the same breadth, such exposures should be kept at very moderate levels and high vigil over profits at higher levels should be maintained.

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
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com