Daily Market Trend Guide -- Tuesday, September 29, 2015

MARKET REPORT                                                                           September 29, 2015

We had expressed concerns about the Markets continuing to remain vulnerable from selling pressure at higher levels in our yesterday’s edition of Daily Market Trend Guide. Keeping in line with the analysis carried out the Markets succumbed to high degree of caution ahead of RBI Credit Policy review as it ended the day after coming from the day’s high. The Market saw a relatively better opening and traded stable in the first half of the day forming the day’s high of 7893.95. The Markets showed relative stability but it was the second half that did much of the undoing for the Markets. Caution weighed in on expected lines as after a range bound trade in the first half  the Markets saw rapid paring of gains in the second half of the session. The Markets went on to form the day’s low of 7787.95, coming off nearly 105-odd points from the high point of the day. No recovery was seen and the Markets finally settled the day at 7795.70, posting a net loss of 72.80 points or 0.93% after forming a similar top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 29, 2015

Markets are poised at a very critical juncture today. Global set up remains and we are likely to open on a gap down opening today again as well. However, the Markets are likely to see openings around the important pattern support at 7660-7675 zone and the behaviour of the Markets vis-à-vis this level would be extremely important to watch out for. There are chances that the Markets remain sideways in the morning trade and then react to the RBI Credit Policy review wherein the 0.25% cut remains discounted for.

For today, the levels of 7920 will continue to remain as resistance. The supports come in at 7720 and 7650-70 levels.

The RSI—Relative Strength Index on the Daily Chart is 42.8384 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have added over 2.30 lakh shares or 1.26% in Open Interest. This signifies creation of fresh shorts of modest quantities in the index futures. The NIFTY PCR stands at 0.90 as against 0.93.

Coming to pattern analysis, the Markets have failed to clear the 7960-8000 resistance zone. This was the support that it broke further following the breakaway gaps on the downside in the first week of September. Since then, the Markets have failed to clear these levels and continue to trade below that with uncertain bearish bias. Having said that, the Markets have a downside pattern support of 7650-7670 levels. Today’s imminent gap down opening is likely to see the Markets trade near those supports. After such imminent gap down opening, the Markets are expected to trade sideways until it reacts to RBI Credit Policy review. If the Markets breach this support zone of 7650-7670, it will get weaker in coming days but the intraday behaviour of the Markets vis-à-vis this level will be important to watch out for.

Overall, some chances of the Markets improving in the second half of the session cannot be completely ruled out for. But some amount of uncertainty will continue to persist. It is advised to refrain from shorts until the Markets breach its pattern support. While remaining completely light and moderate on positions, 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

Daily Market Trend Guide -- Monday, September 28, 2015

MARKET REPORT                                                                                 September 28, 2015

Market shad a relative quiet session and traded much on the expected lines as it ended the day with modest gains amid some amount of volatility. Markets saw a modestly negative opening and it soon weakened further in the morning trade to form the day’s low of 7804.10. However, it soon recovered by late morning trade to trade flat around it s previous close. The Markets spent some time by trading in a capped range in sideways trajectory until afternoon trade. In the second half, the Markets saw some strength returning. It saw a sharp spurt, which was mainly led by expiry related short covering, which took the Markets to its day’s high of 7894.50 by late afternoon trade. Some sideways movement was again observed and the Markets finally settled the day at 7868.50, coming off a bit from its highs and posting a modest gain of 22.55 points or 0.29% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, SEPTEMBER 28, 2015

The Markets shall open today after a long weekend and they are expected to open on a modestly lower note and look for directions. The expiry had been relatively quiet previous week and the Markets continue to remain in a neutral zone and rule still below its key resistance levels of 7960-8000 levels. The set up has been little bearish so long as the Markets continue to rule below these levels. The intraday trajectory would continue to remain crucial.

For today, the levels of 7920 and 7945 will act as immediate resistance levels while the supports would come in at 7810 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.9304 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stands bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 40.9399 and this also remains neutral without showing any bullish or bearish divergence or any failure swings. The Weekly MACD is bearish as it trades below its signal line.

On the derivative front, the NIFTY October series have added over 38.55 lakh shares or 26.56% in Open Interest. The Thursday’s up move has been largely on account of short covering and the overall rollovers have been slightly below average of past six months but in line with last three months. NIFTY PCR stands at 0.93 as against 0.95.

Coming to pattern analysis, we once again come to the major support zone of 7960-8000 levels that the Markets broke on the downside after forming a bearish breakaway gap in the first week of September. The Markets have not been able to fill up those gaps and that area continues to act as major resistance while it moves up. Before that, it will also face resistance in 7960-8000 levels as well. These were the major triple support pattern support that the Markets broke on the downside. These levels, i.e. 7960-8000 will continue to pose resistance as well. Until the Markets moves past these levels, it will continue to remain vulnerable to selling pressure from higher levels.

Overall, the Markets will continue to remain in a broad trading range with the zone of 7960-8000 levels continuing to act as a resistance. Until the Markets remain below these levels, we will continue to see the Markets also remain vulnerable to selling bouts from higher levels. Keeping this in view, we continue to reiterate very cautious stand on the Markets. While avoiding shorts, dips should be used to make fresh purchases but in moderate quantities and maintain a 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