Daily Market Trend Guide -- Friday, September 18, 2015

MARKET REPORT                                                                                September 18, 2015

The Markets continued with its up move on Wednesday and ended the day with modest gains once again as short covering continued in the Indian Markets. The Markets s aw a relatively stable opening and traded with capped gains in sideways trajectory in the morning trade. The Markets saw some paring of its opening gains in the late morning trade but by afternoon it saw itself strengthening once again. It surged and the afternoon trade saw the Markets forming the day’s high at 7913.90. These gains too were maintained as the Markets once again traded sideways in the late afternoon trade. Volatility in the trade was negligible but the Markets pared some of its gains by Close and finally settled the day at 7899.15, posting a net gain of 70.05 points or 0.89% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, SEPTEMBER 18, 2015

Federal Reserve kept the Interest rates unchanged yesterday and the development remained absolutely a damp squib and a non event as the Fed gave no precise indication of the hike in future. Further, the commentary took remained surprising as, in a rare instance, the Fed mentioned possible global slowdown as one of the factors for not hiking rates. Historically, Fed has always remained domestically focussed while commenting on the policy contents. Therefore, we will see a possibly positive opening in the Markets and the trend would again be governed by local factors and technical indicators.

For today, the levels of 7920 and 7990 will act as immediate resistance for the Markets. The supports would come in at7850 and 7780 levels.

The RSI—Relative Strength Index on the Daily chart is 46.4942 and it has reached its highest value in last 14-days which is bullish. Also, RSI has set a fresh 14-day high whereas NIFTY has not yet and this is Bullish Divergence. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, NIFTY September futures have shed yet another over 6.88 lakh shares or 3.09% in Open Interest. This clearly indicates that the up move that we saw on Wednesday was purely on account of short covering. The NIFTY PCR stands at 0.95 as against 0.93.

Coming to pattern analysis, the Markets have pulled back once again after making fresh lows in the first week of September. However, as mentioned in our previous edition of Daily Market Trend Guide, the Markets have shown no signs of formation of bottom and have not shown any confirmation of the same. The possible positive opening today will take the Markets once again near their resistance zone of 7960-8000 levels. Unless the Markets show some consolidation and a higher bottom formation and moves past these levels, it would be difficult to see any sustainable rallies in immediate short term. Further, the up moves that we have seen in previous couple of session have come with declining open interest. This shows there has been purely short covering and total lack of fresh buying. Further, the market breadth has been declining as well with each up move which puts a question mark on its sustainability.

All and all, with Fed event behind us, the Markets will once again return to technicals and domestic cues. There are chances that we see positive opening and the Markets may trade with modest gains in the initial trade but we continue to remain vulnerable to sell off from higher levels. This is because of multiple reasons. We have been seeing up moves purely on basis of short covering and there has been very low participation and therefore lack of buying support at lower levels. Also, we still continue to trade below the key resistance zone of 7960-8000 levels. Which chances of intermittent downward bouts from higher levels, we continue to reiterate very cautious stand on the Markets.

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

Daily Market Trend Guide -- Wednesday, September 16, 2015

MARKET REPORT                                                                                September 16, 2015

Yesterday’s session remained very much on analyzed lines as the Markets gave back much of its previous day’s gain as it ended the day with modest losses. The Markets gave quiet start and soon crawled into the positive territory while forming the day’s high of 7880 in the early minutes of the trade. Thereafter the Markets very quickly pared its gains as it drifted into negative territory. The session remained volatile to some extent but the Markets continued to remain in a downward trajectory for the entire session. By afternoon trade, it saw a sharp dip which took it to from the day’s low of 7799.75. Some minor recovery was seen in the last hour of the trade but the Markets finally settled the day at 7829.10, posting a modest loss of 43.15 points or 0.55% while forming a similar top but slightly higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, SEPTEMBER 16, 205

Aided by positive global cues, the Markets are likely to open on a decently positive note and trade with gains in the initial trade. However, tomorrow being a trading holiday and with the pending FOMC decision on rate hike in the US, we are likely to see larger degree of caution prevailing in the Markets. This may cause the Markets come under some pressure, especially in the second half of the session. Even if we do not see any downsides today, any higher opening and trading levels will continue to keep the Markets vulnerable to selling bouts from higher levels.

For today, the levels of 7880 and 7945 will act as resistance levels for the Markets. The supports come in at 7800 and 7720 levels.

The RSI—Relative Strength Index on the Daily Chart is 43.1599 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY September futures have shed 81,675 shares or nominal 0.37% in Open Interest. This is no indication of any major shift in directional psyche of the Markets.  The NIFTY PCR stands at 0.93 as against 0.94 yesterday.

Coming to pattern analysis, the Markets have formed near parallel bars, and if not a perfect parallel bars on the Daily Bar Charts. This indicates that after forming a lower low earlier this month, the Markets have pulled back but have formed lower high so far. Also, speaking on little broad terms, the Markets are still trading below its key resistance zones of 7960-8000 levels. Every move that takes the Markets near to these levels has met with some selling pressure. All this has happened without volumes and lack of buying at higher levels.

All and all, the Markets hover with uncertainty so far as interest rate hike decision in US is concerned. Also, with a trading holiday tomorrow, it will not be surprising if the Markets remain ranged or face some pressure at higher levels post opening. It would be grossly important for the Markets to capitalize on its expected opening gains. Overall, the continuation of having very modest and selective exposure with more conservation of cash is advised for today.

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