Daily Market Trend Guide -- Tuesday, October 13, 2015

MARKET REPORT                                                                                October 13, 2015

The Markets continued to show healthy consolidation yesterday as well as it continued to resist to its congestion zone and came of the opening highs to end the day with modest losses. The Markets saw a modestly positive opening which had the Markets open in their congestion zone. The Markets formed its intraday high of 8244.50 in the very early seconds of the trade and soon came off from those levels in the morning trade to trade flat. The Markets saw itself heading nowhere at least in the first half and saw itself trading around its previous close. The second half of the session saw some more weakness creeping in. The Markets lost some ground further and went on to form the day’s low of 8128.20, coming off nearly 115-odd points from the high point of the day. It finally settled the day at 8143.60, posting a modest loss of 46.10 points or 0.56% while forming a slightly higher top but lower bottom on the Daily Bar Chart.

MARKET TREND FOR TUESDAY, OCTOBER 13, 2015

The Markets have continued to resist to its congestion zone yesterday and today as well this zone will continue to pose as important resistance levels for the Markets. This keeps the analysis more or less on similar lines again as we can expect the Markets to open on a flat note today as well and look for directions and react to macro data which came out yesterday which remained somewhat better than expected. In any case, the congestion zone between the 50-DMA and the 100-DMA / upper band of the gap will continue to remain important pattern resistance.

For today, the levels of 8215 and 8250 will continue to remain immediate resistance for the Markets. The supports come in at 8092 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.3856 and it 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 Candles, and Engulfing Bearish Pattern has occurred. This formation is a potential signs that the Markets may continue to resist to this zone for some more time to come.

On the derivative front, the NIFTY October futures have added over 5.94 lakh shares or 2.80% in Open Interest. This clearly points finger towards addition of short positions in the Markets. The NIFTY PCR stands at 1 as against 1.02 yesterday.

While having a look at pattern analysis, the Markets have been consolidating in a ranged manner after moving past its resistance levels of 8000-8062 levels. The Markets have now resisted to the congestion zone created by the upper end of the “gap” that the Markets created in first week of September and also to the 100-DMA levels that falls just around that. The Markets have been oscillating in  range bound manner in this zone after some 450-odd points of rise in six straight sessions. The Markets would see a sustainable up move once its moves past these levels. Until this happens, we will continue to see the Markets oscillating and consolidating. However, major downsides are unlikely as suggested by overall pattern analysis and as supported by F&O data.

Overall, the Markets are once again set to see a flat opening. The Markets will also continue to oscillate while attempting to move up again towards the upper end of the congestion zone. The F&O data suggests limited downside and therefore we reiterate our advice to make selective purchases on every corrective dip. In the same breadth, since the Markets are yet to move out of the congestion zone, any existing profits may be vigilantly protected 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

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

Daily Market Trend Guide -- Monday, October 12, 2015

MARKET REPORT                                                                                  October 12, 2015

Markets showed very resilient consolidation on Friday as it ended the day with decent gains though it did come off its opening / intraday highs while resisting to its 100-DMA and its important pattern resistance. The Markets saw a positive and strong opening and it strengthened further in the morning trade to form the day’s high of 8232.20. These levels happen to be very important pattern resistance and the Markets resisted to this. While resisting to this level,  the Markets put itself in some correction mode and retraced gradually from its intraday high in the first half of the trade. At one point, by afternoon trade, the Markets gave up nearly majority of its gains. It was in the last hour and half of the session wherein the Markets once again attempted to pullback. It saw some recovery once again from the intraday low of 8139.65 and finally settled the day at 8189.70, posting a decent gain of 60.35 points or 0.74% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, OCTOBER 12, 2015

Though the Markets have continued to portray good amount or resilience and buoyant undertone, it continues to trade in a congestion / consolidation zone with has resistance of 8230-8260 levels. Today, though the Markets are expected to open on a modestly positive note, the likely opening would again be in this congestion zone. The intraday trajectory that the Markets form, therefore, would continue to remain of critical important to affect the trend for today as well as for immediate short term.

For today, the levels of 8220 and 8260 will act as immediate resistance for the Markets. The supports come in at 8140 and 8075 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.3127 and it does not show any failure swing. However, the NIFTY has formed a fresh 14-period high but RSI has not and this is Bearish Divergence. The Daily MACD remains bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 49.3782 and it remains neutral as it shows no failure swings or any bullish or bearish divergence. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY October future shave added 45,750 shares or 0.22% in Open Interest. This shows no major short covering / unwinding of positions as the OI remains more or less unchanged. This also keeps the underlying buoyancy intact to some extent.

If we have a look at pattern analysis, as mentioned often in our previous editions the Markets have managed to move out / break out of the broad rectangle and have managed to move past its important pattern resistance range of 8000-8060. However, it continues to now trade between its 50 and 100DMA which also happen to be t he “gap” that the Markets created in the first week of September with its upper range being 8240-8260 levels. With the levels of 100-DMA just around there, these zone is again likely to pose a significant resistance to the Markets going forward.

All and all, keeping all this in view, it is clear without doubt that the Markets have shown considerable of resilience and underlying buoyancy even after some six days of straight gains. It has consolidated in sideways manner rather than retracing this makes it even more resilient. However, in the same breadth, the Markets also trade in congestion zone and is yet to pass another important pattern resistance. This will continue to keep the Markets vulnerable to selling pressure from higher levels. While completely avoiding shorts looking at the underlying buoyancy, very selective purchases can be made on dips while protecting profits vigilantly 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

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