Daily Market Trend Guide -- Thursday, October 01, 2015

MARKET REPORT                                                                                September 30, 2015

The Markets witnessed a steady up today after opening on a positive note and it ended the day with decent gains as well. The Markets saw a better than expected opening in the morning as it opened on a higher note. It spent the first half of the session trading in a narrow range but continued to maintain its opening gains. It was the second half of the session that the Markets saw some more strength coming in. The Markets went on to form the day’s high of 7957.70 towards the end of the session. It did form these highs but overall it continued to remain in the broad rectangle trading range that it has been in since couple of weeks. Markets maintained these levels and finally ended the day at 7948.90, posting a decent gain of 105.60 points or 1.35% while forming a higher top and much higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, OCTOBER 01, 2015

The Markets are at very critical juncture today. We can expect the Markets to open on a decently positive note. However, this expected but imminent positive opening will see the Markets opening or trading near its very critical resistance zone of 7960-8000 levels. The Markets have a very critical and multiple pattern resistances at 7960-8000 levels and further and it would be critical to see if the Markets moves past them successfully. It would take Markets good amount of participation while on its way up to make a sustainable attempt to reverse its trend.

For today, the levels of 8000 and 8060 will act as immediate resistance for the Markets. The supports come in at 7875 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.7506 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high but NIFTY has not yet and this is Bullish Divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have shed over 1.71 lakh shares or 0.91% in Open Interest. Individually speaking, this figure is insignificant but it has certainly shown some amount of short covering involved in the trade yesterday.

While looking at patterns, pattern analysis makes it evident that the Markets still continue to remain in a broad trading range and have currently closed below its key resistance levels as of yesterday. The Markets face formidable multiple resistances ahead in terms of the breach supports on its way down and the Gap that it created couple of weeks back. All these will act as major pattern resistances on its way up. The Markets are likely to face serious resistance at 8000-8060 levels. It will have to move past these levels and attempt to fill up the gap that it had created. In nutshell, though the Markets have shown decent up moves it still remains much in the woods and it requires up moves with conviction and volumes to move  past its key pattern resistances.

All and all, it is pretty evident that we are set to see a decently positive opening but at the same time also acknowledge the fact that the Markets will trade very near to its important and multiple pattern resistances. This will continue to keep the Markets vulnerable to seeing profit taking at higher levels.  Also when today is the last working day of the Week once again, we can see some consolidation at higher levels. It is strongly advised to use any available up moves to book and protect profits at higher levels while continuing to keep purchases at moderate 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Wednesday, September 30, 2015

MARKET REPORT                                                                              September 30, 2015

Markets witnessed enormous amount of volatile as it swung nearly 325-odd points during the entire day and ended the day with modest gains after reacting to higher-than-expected 50 bps rate cut by the RBI. The Markets opened expectedly on a lower note following weak global cues but remained much resilient in the initial trade. However, it became weak later in the afternoon as it formed its day’s low of 7691.20. However, it did not breach the support line that we mentioned in our yesterday’s edition of Daily Market Trend Guide and it remained sacrosanct.  It was immediately post RBI 50 bps rate cut that the Markets saw a sharp parabolic upswing. It recovered over 120-odd to recover all of its losses. It further went on to form the day’s high of 7926.55 by afternoon. However, it was the late afternoon trade that saw the Markets coming off once again. It pared some 100-odd points once again but finally ended the day at 7843.30, posting a modest gain of 47.60 points or 0.61% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, SEPTEMBER 30, 2015

The Markets have remained in a broad trading range after taking support near the prescribed pattern supports. Today, we can see the Markets opening on a modestly positive note and look for directions. They way the Markets have not breached its support levels, on the same lines; they are not completely out of the woods as well. They continue to remain in a broad trading range while still continuing to trade below its key resistance zone.

For today, the levels of 7910 and 7945 will act as immediate resistance for the Markets. The supports come in at 7790 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.4254 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY October series have added over 2.25 lakh shares or 1.21% in Open Interest. The NIFTY PCR stands at 0.91 as against 0.90 yesterday. Some fresh shorts have been added as the Markets have reported net increase in Open Interest after coming off nearly 100-odd odd points from the high point of the day.

Coming to pattern analysis, the Markets have continued to remain in a broad trading range after yesterday’s pullback from lower levels. The pattern support of 7650-7670 level still hold good for the Markets. However, on the upside, the Markets continue to face resistance near its key resistance zone of 7960-8000 levels. The Markets have not been able to move past this zone after breaking it on the downside. Currently it continues to trade in a very broad trading range. The overall trend in the Markets remains sideways and due its  is broad trend, some good amount of volatility have continue to remain ingrained in it.

Overall, it is pretty clear from the technical charts that the Markets have failed to form any directional bias. It still continues to trade with uncertain bias and remains in a broad trading range. The key resistance zone of 7960-8000 levels still hold good for the Markets. There will be no sustainable up move until the Markets moves past this level. However, with the trading range remaining quite broad, the Markets too will witness some good amount of volatility as well. It is advised to continue to remain very modest on exposures and maintain liquidity in 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