Daily Market Trend Guide -- Friday, November 06, 2015

MARKET REPORT                                                                                 November 06, 2015

Markets had a thoroughly disappointing session once again as it breached its important pattern support as it ended the day with losses. The Markets saw a flat opening on expected lines and as it has been doing since last couple of sessions, formed its intraday high of 8031.20 in the early minutes of the trade. After trading with capped losses in the morning, it slipped a bit only to recover again by early afternoon trade. It was the second half of the session that did most of the undoing. The Markets saw sudden and persistent weakness creeping in as it started gradually losing ground. It saw sustained weakness, more so in the last hour of the trade as it went on to breach the 8000-mark and formed its intraday low of 7944.10. No major recovery was seen and the Markets finally settled the day at 7955.45, posting a net loss of 84.75 points or 1.05% while forming a sharply lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, NOVEMBER 06, 2015

Markets may open today on a flat to mildly positive note while keeping a heavily cautious eye on the Bihar polls result as the overall structure continue to remain little subdued and cautious. The Markets might see opening around its rising trend line support and it would be once again critical to see if this trend line holds as support. If not, then some more weakness cannot be ruled out. However, there are some chances of some consolidation or a mild relief rally, but cautious would continue to weigh very heavy on the Markets.

For today, the levels of 7985 and 8040 will act as immediate resistance for the Markets. Supports come in at 7940 and 7880 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.1314 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 remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY November series have added over 3.56 lakh shares or 1.91% in Open Interest.  This indicates initiation of net short positions in the Markets. The NIFTY PCR stands at 0.86 as against 0.90.

While having a look at pattern analysis, the Markets have breached its other patter support of 8000 level and has also closed a notch down below its 50-DMA which stands at 7985 today. Going up, these levels are once again likely to pose resistance to the Markets. However, as of now, the Markets now rests at a short term rising trend line support and it would be important to see once again if the Markets manages to find some base or attempts to take support here. Any further breach will induce some more immediate short term weakness in the Markets. However, there are chances that the Markets might see a relief rally but the sentiment will face resistance from the heavily cautious outlook that the Markets are wearing.

All and all, the Markets are currently at a very critical juncture wherein it has multiple pattern resistances going upwards. On the other hand, it rests at a short term support of a rising trend line and it would be interesting to see if the Markets hold to that support. External factors like Bihar poll outcome will induce some volatile oscillations in the Markets. It is advised to refrain from creating any significant exposure in the Markets and maintain enough liquidity to absorb volatile movements. Continuation of 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 -- Thursday, November 05, 2015

MARKET REPORT                                                                                 November 05, 2015

Markets thoroughly disappointed yesterday as it ended the day with modest losses and failed to capitalize on the positive opening once again. The Markets saw little less strong opening than what was expected and formed its intraday high of 8116.20 in the very early minutes of the trade. We had mentioned expected opening around its resistance levels of 8120 and the Markets resisted precisely there. Thereafter, it remained in downward falling trajectory throughout the session and pared all of its opening gains by afternoon trade. In the late afternoon trade, the Markets dipped further in the negative as it formed its intraday low of 8027.30 while coming off nearly 90-odd points from the high of the day. It finally settled the day at 8040.20, posting a net loss of 20.50 points or 0.25% while forming a slightly higher top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, NOVEMBER 05, 2015

Markets are expected to open on a flat note and shall struggle to make it above 8050 levels. It would be important for the Markets to move past 8050 levels so as to continue to remain in consolidation state. However, with the modestly lower to flat opening expected, the possibility of the Markets testing its important pattern support zone of 7995-8010 cannot be ruled out which also coincides with its 50-DMA. Therefore, this again keeps the overall analysis on similar lines and the intraday trajectory would be important to watch out for.

For today, the levels of 8055 and 8110 shall act as immediate resistance levels for the Markets. Supports exist at 7995 and 7960 levels.

The RSI—Relative Strength Index on the Daily Chart is 43.8301 and it has reached its highest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed over 3.03 lakh shares or 1.60% in Open Interest. There has been clear unwinding of positions seen from higher levels given the reduction of Open Interest. The NIFTY PCR stands at 0.89 as against 0.90 levels.

Coming to pattern analysis, the Markets have attempted to take support once again near 8050 levels though it has closed a notch below that. It would be, therefore, important for the Markets to move past 8050 levels to continue to remain in a broad range bound consolidation. However, in event of some more weakness persisting, the markets have possibilities to test the levels of 7995-8010 support zones. These remain one of the important supports for the Markets as any breach will induce weakness for the immediate short term.

Given the overall analysis, it is imperative for the Markets to maintain levels above 7995-8010 levels in order to avoid further weakness from creeping in. Given the expected flat opening, the Markets are likely to continue to trade in a range. Since the Markets have not made any significant breach on the Daily Chart, it is advised to refrain from creating any shorts in the Markets. It is advised to continue to use dips for making modest and selective purchases while maintaining a positive caution on the Markets.

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