Daily Market Trend Guide -- Wednesday, October 07, 2015

MARKET REPORT                                                                             October 07, 2015

The Markets showed good amount of resilience yesterday after Monday’s gain as it ended the day with modest gains recovering from the day’s lows. The Markets saw little subdued opening and after opening in the positive note it drifted slowly in the first half of the session to trade flat. By afternoon trade the Markets gradually but slowly dipped into the negative. It got little weaker by afternoon as it formed the day’s low at 8096.50 but took support at its 50-DMA. The second half of the session saw some decent reversal coming in. The Markets reversed its trend and recovered its losses to trade flat. The late afternoon trade saw the Markets going further into positive territory.  It further went on to form the day’s high at 8180.95, recovering nearly 85-odd points from the low point of the day. Some gains were pared from these levels and the Markets finally settled the day at 8152.90, posting a modest gain of 33.60 points or 0.41% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, OCTOBER 07, 2015

Markets are likely to see some consolidation today. We are likely to see the Markets opening on a flat note and look for directions. It is important to note that the Markets have advanced over 490-odd points in last five sessions and therefore it cannot be ruled out that it might see itself consolidating at higher levels. It is also important to note that the Markets are approaching its another pattern resistance as well.

For today, the levels of 8180 and 8225 will act as immediate resistance levels for the Markets. The supports would come in at 8110 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.6723 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 Chart. The Daily MACD remains bullish as it trades above its signal line.

Coming to derivative front, the NIFTY October series have shed a 17,750 shares or nominal 0.09% in Open Interest. The OI, practically remains unchanged, and therefore we can safely assume continuation of bullish undertone in the Markets. The NIFTY PCR stands at 0.99 as against 0.97.

Coming to pattern analysis, the Markets have broken out of the broad trading range as mentioned often in our previous editions of Daily Market Trend Guide. While doing so, it has moved past its key resistance levels of 7960-8000 zone and also 8060 levels. It now trades above its 50-DMA and in event of any consolidation, it is likely to test supports of its 50-DMA levels. In event of some consolidation persisting, it is likely to test its supports of 8060 levels. This is because this is the level which was as resistance earlier and is now expected to act as support in event of any consolidation.

All and all, given the technical structure of the Markets and also given the fact that it is risen some 490-odd points in last five sessions, it is very much likely that it sees some selling pressure and minor profit taking at higher levels. Any up moves should be now utilized to protect existing profits. Dips should also be used to make modest purchases while remaining extremely selective. Cautious optimism 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 -- 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