Daily Market Trend Guide -- Wednesday, November 04, 2015

MARKET REPORT                                                                          November 04, 2015

Markets failed to capitalize on its stronger opening yesterday and continued to remain very volatile while it ended the day with minor gains. The Markets saw a good positive opening and traded with modest gains in the morning trade. It formed its day’s high of 8100.35 in the morning trade but spent much of the first half trading in sideways trajectory. The afternoon trade saw the Markets slipping from its highs and at one point pared all of its morning gains to trade flat. It also went on to dip into negative territory forming day’s low of 8031.75. Markets came off nearly 70-odd points from the high point of the day. The last hour and half of the trade saw some recovery coming in once again but the Markets did not sustain that and once again pared gains to trade flat. It finally ended the day at 8060.70, posting a minor gain of 9.90 points or 0.12% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, NOVEMBER 04, 2015

We had mentioned in our yesterday’s edition that the Markets have attempted to form a bottom near its 50-DMA which coincides with its important pattern support, the Markets are slated today to open on a near gap up note. However, in the same breadth, the analysis for today continues to remain on similar lines and it would be important to see if the expected good opening is not sold into and the Markets manages to capitalize on its expected strong opening.

For today, the expected levels of immediate resistance are 8125 and 8180 levels. The supports exist at 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.3525 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have added over 59,625 shares or just 0.31% in Open Interest. This can be interpreted as nearly unchanged figure. The NIFTY PCR stands at 0.90 as against 0.88 yesterday.

While having a look at pattern analysis, the Markets now exists between important pattern supports of 8050 and 8010 levels. The lower end of this trading range remains more important as it coincides with the levels of 50-DMA just below this. Therefore, in event of any consolidation, it would remain very much important for the Markets to remain above this critical level of 8000-8010. Today’s opening is likely to see it opening well above 8120 levels and it will not be surprising if the Markets attempt to test its another pattern resistance near 8200 levels in coming day. However, in order to do this, it would be important for the Markets to capitalize on each on expected strong opening. It would be critical to see that the rally does not gets sold into.

All and all, we continue to remain on our overall opinion of refraining from shorts even at higher levels. Though any significant up moves should be utilized to protect profits at higher levels. Dips / consolidation should be continued to be used for making selective purchases. However, the Markets will tend to oscillate in a broad range until it moves past 8200 levels. Overall, continuance of positive 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 -- 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