Daily Market Trend Guide -- Tuesday, October 20, 2015

MARKET REPORT                                                                                    October 20, 2015

The Markets attempted to break out of the congestion zone yesterday as it made a feeble attempt to move past the resistance zone and end the day with modest gains. The Markets saw a positive and better than expected start but after a positive start; it soon drifted to its previous close levels and traded flat. The Markets spent most part of the session in a sideways trajectory trading in a narrow range while it formed its day’s low of 8239.20. Markets continued to trade sideways but it was the second half of the trade once again that saw some strength coming in. The Markets gained some strength and formed its intraday high of 8283.05. Some more sideways movement came in, the Markets more or less maintained these levels and finally ended the day at 8275.05, posting a net gain of 36.90 points or 0.45% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, OCTOBER 20, 2015

Markets continue to poise them at a critical juncture as it is made a feeble attempt to move out of the congestion zone. Today, we can expect the Markets to open on a modestly positive to flat note and then look for directions. There are chances that the Markets continue to consolidate at higher levels rather than giving a runaway rise. The intraday trajectory that it forms post opening would be crucial to determine the trend for today as well as for immediate short term.

For today, the levels of 8290 and 8330 will act as immediate resistance for the Markets. The supports come in at 8240 and 8180 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.2688 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have shed over 3.90 lakh shares or 1.92% in Open Interest. This shows some unwinding of positions at higher levels and may cause the Markets to remain in consolidation zone for some more time.

Coming to pattern analysis, the Markets have attempted to move past the upper boundary of the congestion zone but the attempt so far has been bit feeble. Further, it has come while shedding Open Interest and therefore it is likely that the Markets may continue to remain in consolidation zone for some more time. In the same breadth, the 8230-8240 levels which the Markets managed to move past yesterday should act as immediate pattern support. Any breach of the levels on the downside will take the Markets back into the broad consolidation zone. Therefore, it would be important for the Markets to maintain itself above 8230-8240 levels in order to just consolidate for some more time and avoid any weakness.

All and all, the Markets may open flat and see some sideways consolidation in the initial trade. However, given the structure of the technical charts, by no means are the Markets weak and they are in fact making attempts to move out of the consolidation zone that they have been trading in. In event of any more consolidation or temporary downsides, these downsides should be utilized to make  quality purchases on moderate levels while protecting profits going ahead until a clear directional breakout is achieved.

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 19, 2015

MARKET REPORT                                                                                October 19, 2015

After spending nearly entire session in a sideways trajectory, the Markets saw a spurt in the late afternoon trade on Friday as it ended the day with decent gains. The Markets saw a quiet opening on expected lines and spent the first half of the session in modestly negative territory. The Markets traded modestly negative and spent nearly major part of the session in a sideways trajectory. Post opening in this manner, the Markets remained 30-odd point range, formed its intraday low of 8147.65 by afternoon but remain virtually directionless in the process as it headed nowhere. However, with inherent buoyancy coming to play, the Markets saw a sharp spurt in the final hour and half of the day. It saw a near parabolic move as it formed its day’s high of 8246.40. The Markets finally settled the day at 8238.15, posting a net gain of 58.65 points or 0.72% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, OCTOBER 19, 2015

Today’s session remain critical for the Markets. The Markets have closed a notch above its 100-DMA but very near to its upper resistance of the pattern. On the other hand, though it is attempting a further breakout, it is likely to open today on a modestly negative note. There are fair chances that the Markets opens a notch below its pattern resistance levels of 8230-8240, just near its 100-DMA and look for directions. The Markets remain inherently buoyant and it would be critically important to see if it attempts a breakout from the congestion zone today.

For today, the levels of 8230-40, and 8320 are important resistance levels for today. Supports come in at 8205 and 8130 levels.

The RSI—Relative Strength Index on the Daily Chart is 61.5743 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 50.5474 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Weekly MACD is bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY October futures have added over 2.03 lakh shares or 1.01% in Open Interest. This portrays inherent buoyancy in the Markets. The NIFTY PCR stands at 1.01 as against 1.00.

Coming to pattern analysis, the Markets have been in the congestion zone over last fortnight after it attempted to move past its first pattern resistance. After this, it has been resisting to the upper end of the gap that it formed in the first week of September and this has been acting as its important pattern resistance for quire some time. Though the Markets have attempted to move past and break out of that congestion zone, it still trades a notch below that. Today’s modestly lower opening is likely to keep it below that resistance zone and it would be critically important to see that it moves past that resistance level in order for a fresh sustainable up move.

Overall, until the Markets moves past the levels of 8230-40 levels, it will continue to remain in this broad congestion zone. However, looking at the inherent buoyancy in the Markets, any downsides would remain resilient and it is strongly advised to refrain from creating any short positions. Downsides, if any should be used to make selective modest purchases. While protecting profits at higher levels until a clear breakout, cautious optimism is advised for the day.

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