Daily Market Trend Guide -- Tuesday, October 06, 2015

MARKET REPORT                                                                               October 06, 2015

Markets had a very strong session as it opened on a gap up and strengthened further to move past its key resistance zone to end the day with robust gains. The Markets saw a sharply higher opening after it opened yesterday after a long weekend. The opening was supported by positive and strong global cues. The opening levels of the Markets saw itself opening near its key resistance zone of 8000-8061 levels. The Markets spent the first half of the session trading sideways in a narrow range while fiercely protecting its opening gains. It was in the second half that the Markets broke out on the upside while it formed its intraday high of 8128.90 while it went on to test its 50-DMA. This up move too was sustained and the Markets finally settled the day at 8119.30, posting a robust gain of 168.40 points or 2.12% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, October 6, 2015

The Markets are set for a decently positive opening once again as and have attempted a serious trend reversal attempt. Expect the Markets to open on a strong note and continue with its yesterday’s up move. The Markets have halted their up move at its 50-DMA and today, with its opening above it, this level is likely to act as support if the Markets close above this level. More importantly, the 7960-800 zone and the levels of 8061 will not act as major pattern support in future.

For today, the levels of 8170 and 8205 will act as immediate resistance for the Markets. The supports will come in at 8061 and 8000 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.3498 and it has reached its highest value in last 14-days which is bullish. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have 12.44 lakh shares or 6.52% in Open Interest. This is a very strong indication of the overall long and bullish bias of the participants. The NIFTY PCR stands at 0.94 today.

While having a look at pattern analysis, post the lows formed in the first week of September, the Markets were trading in a broad trading range in a rectangle. Having said this, the levels of 7960-8000 range and further at 8061 were one of the major pattern resistances on the Daily Charts. The reason was that the former was the major support that the Markets broke on the downside and the later was the “gap” that the Markets created while opening on a gap down in September first week. Further to this, in yesterdays up move, the Markets have managed to move past this level in a decisive move and in future, in any event of consolidation or correction, these levels are expected to act as important pattern support. The Markets currently have halted at its 50-DMA but with today’s expected higher opening, it is likely to fill up gap and move towards meet its another pattern resistance at 8235 levels.

Overall, the Markets are poised for a continuation of up move and it is likely to fill up the gap that it has created and is likely to approach another major pattern resistance level of 8235. The Markets is likely to see some consolidation or minor profit taking at higher levels. So, in the event of the Markets approaching 8200 levels, it is advised to continue to lay emphasis on protecting profits at higher levels. Purchases may be made on any dips on very selective basis as sectoral out performance would continue.

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, October 05, 2015

MARKET REPORT                                                                            October 05, 2015

Markets had a day of consolidation on Thursday as it opened near its key resistance zone and during the day, pared its opening gains to end the day on a flat note. The Market saw a better then expected positive opening and formed its intraday high of 8008.25 in the morning trade after trading in a capped range. The Markets soon pared all of its opening gains, very much on expected lines as the key resistance zone of 7960-8000 played its part, and it traded flat near its previous Close. The Markets thereafter traded in sideways trajectory for the rest of the session trading in a very narrow and capped range. While forming the day’s low of 7930.65 in the afternoon trade, the Markets remained sideways in a 20-odd point range. While remaining directionless, the Markets finally ended the day at 7950.90, posting a nominal gain of 2 points or 0.03% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, OCTOBER 05, 2015

Today’s analysis continues to remain on similar lines that of Thursday. Reason being, the Markets are slated to open on a positive note and once again open near its key resistance zone of 8000-mark. Having said that, the Markets have multiple resistance zone ahead of 8000-mark which include 8061, the pattern resistance created by the Gap that the Markets created in the early September. Having said this, once again, it would be paramount importance that the Markets maintain its gains post opening. The intraday trajectory that the Markets form post opening would once again be of critical importance.

For today, the levels of 8000 and 8061 will be immediate resistance levels for the Markets. The supports come in at 7910 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.8484 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high whereas NIFTY has not yet, and this is Bullish Divergence as well. The Daily MACD remains bullish as it continues to trade above its signal line. On the Weekly Charts, the Weekly RSI is 23.2360 and it remains neutral as it does not show any bullish or bearish divergence or any failure swing. The Weekly MACD remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY October series have added over 4.39 lakh shares in Open Interest. The NIFTY PCR stands at 0.91 as against 0.92 on Thursday.

Coming to pattern analysis, the Markets still continue to trade within a broad trading range that it has formed after the breakdown on the lower side in the early September. The Markets still continues to face stiff pattern resistance near the 7960-8000 mark followed by 8061 because of the breakaway gap that it created post break down from the Head and Shoulder Formation in early September. Having said this, as mentioned, it would be critical importance for the Markets to move past these key pattern resistance zones to try and confirm the reversal of trend. Until this happens it will continue to trade in this current trading zone. Even on the Weekly Charts, the 8000-mark is a important pattern resistance.

Because of all this, it becomes even more important for the Markets to maintain its opening gains and capitalize on it. Until these pattern resistances are cleared, the Markets would continue to remain vulnerable to sell-offs and profit taking bouts at higher levels. No significant fresh purchases should be made until these levels are crossed and all such up moves should be utilized in protecting profits. Fresh purchases, as usual, should be kept very selective and limited.

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