Daily Market Trend Guide -- Tuesday, September 22, 2015

MARKET REPORT                                                                                September 22, 2015

Markets heavily consolidated as it ended on a flat note but had to recover all of its losses post a weak and near gap down opening. The Markets saw a very weak opening as it opened nearly just less than a percent down following mixed global cues. However, post opening the Markets formed its day’s low of 7908.35 in the early minutes of the morning trade. Thereafter, the Markets remained in upward rising trajectory throughout the session. It slowly but steadily recovered all of its morning losses. Though it remained in sideways trajectory in the afternoon trade, by the end of the session, it had managed to recover all of its losses and also traded positive for a very brief period while it formed its intraday high of 7987.90. It hovered around those levels for a while and finally ended the day at 7977.10, posting a very flat close with negligible loss of 4.80 points or 0.06% while forming a lower top lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 22, 2015

We can expect a relatively quiet opening today as the Markets are likely to open on a flat note. However, the opening levels are likely to be the near the resistance levels as evident from the Daily C hart and therefore it would be important to see the trajectory that the Markets form post opening. The F&O data suggest both volatility and the possibility of trading in a capped range. The rollovers would continue to dominate the session.

For today, the levels of 7995 and 8050 will act as immediate resistance levels for the Markets. Supports come in at 7920 and 7880 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.9930 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, rollovers continued as the NIFTY September futures shed over 27.35 lakh or 12.52% in Open Interest whereas the October series added over 37.82 lakh shares or 125.79% in Open Interest. The NIFTY PCR stands at 1.00, remaining unchanged.

Coming to pattern analysis, as evident from the Charts, the Markets continued to resist precisely in the 7960-8000 levels. Today’s opening is likely to remain around those levels and therefore the trajectory that the Markets forms post opening would be crucial to watch out for. Having said this, on the upside, some significant pattern resistance too exists near 8050 levels as the Markets may also resist to the gap that it had created earlier which has not yet been filled in. This space can act as major pattern resistance in coming days.

Overall, keeping the overall technical structure in view, the Markets may move up to test its previous resistance levels mentioned above but may not see a very significant up move before expiry. Whereas with some space existing on the downside, the Markets still continues to remain without any directional bias and in a broad trading range. It is advised to continue to remain very moderate on exposures with highly selective approach.

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 -- Monday, September 21, 2015

MARKET REPORT                                                                        September 21, 2015

Just as the Fed event was over, the Markets were taken over purely by technical factors perfectly as expected by us in the Friday’s edition. The Markets saw a gap up opening and after opening strong and positive in the morning, it strengthened further by mid session as it formed the day’s high at 8055. However, the Markets reacted precisely at the gap that it had crated while it had a gap down opening and therefore it faced a very strong resistance at that point. It not only resisted but also failed to maintain those levels. The second half of the Markets saw itself paring bulk of its gains and it again went down to trade near its pattern resistance levels / zone of 7960-8000 levels. The Markets have so far failed to fill up the break away gap it has formed and today reacted fiercely from there. It finally managed to end the day at 7981.90, posting a net gain of 82.75 points or 1.05% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, SEPTEMBER 21, 2015

Though the Markets ended quite off form the high point of the day on Friday, they have once again created an “area gap”. Today, the Markets are likely to open on a modestly negative note and look for directions. The Friday’s session have seen quite large amount of short covering but at the same time, it would be equally important to see if this is followed up by fresh buying. With this being expiry week, the Markets will remain dominated with rollover centric activity with some bias towards the Markets attempting to find bottoms in this broad trading range.

For today, the levels of 7995 and 8055 will act as immediate resistance levels for the Markets. The supports come in at 7930 and 7850 levels.

The RSI—Relative Strength Index on the Daily Charts is 50.2099 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence on the Charts. The Daily MACD is bullish as it continues to trade above its signal line. On the Weekly Charts, the Weekly RSI is 43.1715 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have added over 2.97 lakh shares or 1.38% in Open Interest. This mildly indicates majority of the shorts are being covered with some more shorts coming in above 8000-levels. The NIFTY PCR stands at 1.00 as against 0.95 on Friday.

Coming to pattern analysis, the Markets have pulled back over 500-odd points from the lows of 7539.50 that it formed on September 08^th 2015. However, that being said it has continued to resist at the 7960-8000 range first and then to the “gap” that was created in the last week of August when the Markets saw a significant downsides. This breakaway gap has been a major area of resistance over and above 7960-8000 levels and the Markets have continued to resist in this area. Further, though the Markets have once again crated a higher “gap” on Friday, but this is a area gap and appeared within a formation and holds little significance. Also, it is more likely to be closed in coming session.

Overall, the Markets still continue to remain little precarious and going by the pattern analysis, some amount of weakness may still continue. Having said this, the rollovers to will effect and dominate the Markets for next couple of sessions. Also, though there are some chances of the Markets testing higher levels, it has not shown any signs so for of confirmation of bottom. Given this situation, we continue to reiterate our cautious stand on the Markets. It is advised to continue to keep purchases highly selective and limited while maintaining high degree of caution at higher levels.

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