Daily Market Trend Guide -- Tuesday, August 04, 2015

MARKET REPORT                                                                        August 04, 2015

The Markets remained in an extremely capped range yesterday as it headed nowhere while ending the day with nominal gains. The Markets opened on a quiet note and traded mildly positive in the morning trade. It gathered moderate strength while it formed its high point of the day at 8563.95 by afternoon. The Markets failed to show any conviction on the upside. In the second half, the Markets gave up all of its modest gains and traded flat. It also went very briefly into the negative territory while it formed its intraday low of 8508.10. However, some recovery was seen again in the later part of the afternoon trade. The Markets spent the session in a very narrow and capped ranged and remained in some 30-odd points range. It finally ended the day at 8543.05, posting a nominal gain of 10.20 points or 0.12% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, AUGUST 04, 2015

The Markets are once again set for a flat to mildly negative opening. The Markets continue to trade below its resistance zone that we have been mentioning in previous two editions of Daily Market Trend Guide and today as well, it is likely to continue to resist to those levels with a positive bias. The Markets are also set to react to the RBI Credit Policy coming up later in the day. However, with the rates very much likely to remain unchanged, this would remain a non-event for a larger extent.

For today, the levels of 8575 and 8610 will act as immediate resistance levels for the Markets. The supports come in lower at 8490 and 8445 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.4044 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the derivative front, NIFTY August futures have shed over 4.04 lakh shares or 2.35% in Open Interest. This figures indicates that there can be some more consolidation in the Markets before it resumes its up move. In other words, such data suggests prevention of runaway rise in the Markets unless the Markets get a immensely positive trigger which is very less likely.

Coming to pattern analysis, the Markets continues to trade below the trend line which is breached on the downside couple of sessions back. As mentioned often in our previous editions of Daily Market Trend Guide, this rising trend line will continue to act as resistance (which was earlier a support). Further, because of the rising nature of this trend line, the levels that the Markets need to move past for a breakout too keeps rising. This prevents a clear breakout, or at least makes it difficult.

Overall, the Markets are likely to continue to see a ranged movement with some moderate amount of volatility ingrained in it. The RBI Policy is likely to remain a non-event but any cut, which is just not expected, will act as a positive trigger. Overall, the Markets are likely to remain in a range with some intermittent bouts of profit taking at higher levels. Purchases should be kept restricted and extremely selective until the directional bias in the Markets gets clear.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, August 03, 2015

MARKET REPORT                                                                                         August 03, 2015

The Markets ended the day on a robust note as the Markets opened higher, gathered more strength on  its way as it went ahead in the session and ended the day with decent gains. The Markets saw much better than expected opening once again and traded with decent gains in the morning trade. The morning trade remained more or less range bound sideways movement in the Markets. However, soon in the late morning session, the Markets gathered further strength and transformed itself into rising trajectory. For the rest part of the session, the Markets kept making fresh gradual highs and went on to form the day’s high at 8548.95. These levels were maintained and the Markets finally ended the day at 8532.85, posting a decent gain of 111.05 points or 1.32% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, AUGUST 03, 2015

Today, expect the Markets to open on a flat note and expect cues for its movement thereafter. In our Friday’s edition of Daily Market Trend Guide, we had mentioned the levels of 8550 to act as resistance as the Markets approaches the rising trend line support that it broke couple of days back. Today as well, the same trend line, which is now resistance, will continue to pose resistance in the range of 8550-8585 levels.

For today, the levels of 8575 and 8640 will act as immediate resistance for the Markets. The supports come in at 8470 and 8430 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.8450 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY August futures have added over 6.54 lakh shares or 3.94% in Open Interest. This indicates creation of fresh longs and the NIFTY PCR stands at 0.91 as against 0.85 on Friday.

Coming to pattern analysis, the overall structure remains similar to that of Friday. The Markets have broken the support of the rising trend line of the channel it had formed after forming lows of 8000-levels. This rising trend line, which was a support earlier will now act as resistance on its way up. This levels would be 8550-8580 and the Markets will continue to face resistance at these levels. Due to the rising nature of this trend line, the resistance levels too will keep going up which will prevent the Markets from a clear cut break out on the upside. It would, therefore be necessary, for the Markets to move past these levels with conviction. However, this may also induce some consolidation in the Markets.

Overall, we continue to reiterate the stance of caution in the Markets. The Markets would also react tomorrow to the RBI’s review of credit policy which is expected to keep the rate unchanged. The technical structure on the Daily Chart and the pattern analysis is unlike to give Markets a runaway rise. In case of any speedy up move, it would equally increase the chances of consolidation at higher levels. However, with the overall sentiment remaining intact, selective purchases with vigilant protection of profits at higher levels can be done.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com