Daily Market Trend Guide -- Tuesday, November 03, 2015

MARKET REPORT                                                                                     November 03, 2015

Markets ended with losses for the sixth day in a row but it ended yesterday after recovering significantly from its lows while attempting to form a base. The Markets saw a negative opening and the Markets opened below its critical levels of 8050. For the entire morning trade, the Markets struggled to move past this level. After initial range bound trade, the Markets started to lose ground gradually. It remained in downward trajectory and went on to form the day’s low of 7995.60 while testing its 50-DMA and its important pattern support levels as well. While this happened perfectly on expected lines, the final hour and half of the trade saw substantial recovery from the low point of the day. The Markets nearly recovered bulk of its losses and finally ended the day at 8050.80, posting a modest loss of 15 points or 0.19% while continuing to form a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, NOVEMBER 03, 2015

Though the Markets have ended in the red for six consecutive days, it has attempted to form a base and find bottom yesterday as it took support near its patter support and its 50-DMA. Today, we can fairly expect a positive opening and see relief rally at least in the initial trade. So far, this will make the pattern support hold and the levels of 8050 and 8000 will return as all-important pattern supports in event of consolidation returning.

For today, the levels of 8080 and 8125 will act as immediate resistance. The supports will come in at 8005 and 7960.

The RSI—Relative Strength Index on the Daily Chart is 44.4878 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Daily MACD remains bearish as it trades below its signal line.  The Candles indicate potential short term bottom formation on the Daily Charts.

On the derivative front, the NIFTY November series have added over 1.81 lakh shares or 0.97% in Open Interest. This shows no major short covering took place from the bottom yesterday. Modest long positions are seen to have been built as well. The NIFTY PCR stands at 0.88 as against 0.85.

Coming to pattern analysis, today’s expected positive opening will take the Markets above the important levels of 8050. Once the Markets opens above this, this level of 8050 is expected to act as one of the important pattern support. It will also take the Markets back into the other consolidation/trading zone and the Markets are again expected to oscillate with minor positive bias. However, in the entire process, it would be important for it to maintain the support  zone of 8050-8000 levels to avoid any major short term weakness.

All and all, with the Markets expected to open above 8050 levels; it has more or less averted any major weakness in the immediate short term. It would be important to see that the Markets keep its head above this and the rallies are not sold into. It is advised to refrain from creating any major exposures and keep it limited and selective. Overall, a cautious outlook 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 -- Monday, November 02, 2015

MARKET REPORT                                                                                    November 02, 2015

Markets saw correction continuing as it traded very much on dotted lines and ended yet another day with losses while testing its important pattern supports. The Markets opened on a flat note and trade sideways in the morning trade while briefly dipping into negative for a very brief period. It saw some strength coming in the first half of the session as it perked up a bit and formed its day’s high of 8146.10. The Markets maintained these gains for a very short time as in the afternoon, slowly pared its gains to trade flat. It dipped into negative and in the second half of the session slipped further and went on to form the day’s low of 8044.40. The Markets came off nearly 100-odd points from its intraday high tested its important pattern support. It did make a very feeble attempt to recover but finally settled the day at 8065.80, posting a net loss of 45.95 points or 0.57% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 02, 2015

In Friday’s edition, we had expressed possibilities of the Markets testing the pattern supports of 8050 levels. Today as well, it keeps the analysis more or less on similar lines. Today expected subdued opening will again cause the Markets to open near its pattern supports. It would be critically important for the Markets to keep its head above this level. Any breach will cause the Markets to test its other pattern support which coincides with its 50-DMA as well.

For today, the levels of 8100 and 8125 will act as immediate resistance levels. The supports come in at 8050 and 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.5006 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD on the Daily Chart is bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 46.2555 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Weekly MACD is bullish as it trades above it signal line.

On the derivative front, the NIFTY November futures have added over 9.49 lakh shares or 5.32% in Open Interest. This is clear indication of shorts being created afresh. The NIFTY PCR stands at 0.84 as against 0.86.

Coming to pattern analysis,  as mentioned in the opening paragraph, it would be important for the Markets to keep its head above the levels of 8050. Any downward breach will see the Markets testing another pattern support which also coincides with its 50-DMA. However, if we read the technicals on both Daily and Weekly Chart, it is very much likely that the Markets out performs its Asian peers and we see very limited downsides as such. Even if the Markets consolidate for a day here or there, the overall weekly charts indicate some amount of resilience at lower levels.

Keeping the overall reading of Daily and Weekly Charts as well, we expect the Markets to resist to relative downsides and remain resilient at lower levels. It is advised to refrain from shorts and continue to utilize the downsides to make selective quality purchases. However, with the Markets continuing to remain in corrective mode, such purchases should be kept limited. Overall, 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