Daily Market Trend Guide -- Tuesday, November 17, 2015

MARKET REPORT                                                                         November 17, 2015

Markets saw a technical pullback, quite on expected lines as it ended the day with gains after opening on a lower note. The Markets saw a negative opening and it drifted further down in the morning trade while it formed its intraday low of 7714.15. Just when it seemed that it is yet another day of losses, the Markets reversed its trajectory and transformed itself into a upward rising channel. By early afternoon trade, the Markets had reversed and recouped all of its opening losses and traded flat. This trajectory was maintained until the end of the session as the Markets continued posting fresh intraday highs gradually. It recovered over 120-odd points from the low point of the day while it formed its intraday high at 7838.85. It came off a bit from those levels but finally settled the day at 7806.60, posting a net gain of 44.35 points or 0.57% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, NOVEMBER 17, 2015

After attempting to form a base yesterday after being nearly oversold, the Markets are set to open once again on a positive note and look for directions. Though somewhat modestly positive opening is expected, the Markets are not completely out of the woods and have not confirmed any reversal. However, given the technical structure of the Charts, some technical relief rally is expected to continue to a modest extent.

For today, the levels of 7840 and 7885 are immediate resistance levels for the Markets. The supports come in at 7740 and 7710 levels.

The RSI—Relative Strength Index on the Daily Chart is 34.6331 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.

On derivative front, the NIFTY November futures have shed over 3.98 lakh shares or 2.27% in Open Interest. This makes fairly evident the fact that the yesterday’s rise has been primarily on account of short covering in the Markets. The NIFTY PCR stands at 0.72 as against 0.71 yesterday.

While having a look at pattern analysis, the Markets nearly approached its important pattern support levels of 7680 while it formed its intraday low of 7714 yesterday. So far, the Markets have maintained support at the vicinity of this level. Short covering saw the Markets giving a modest relief rally yesterday while holding on this support. Technical structure and the lead indicators on the Daily Chart suggest continuation of such modest technical pullback in immediate short term. However, it is important to note that the Markets have not formed / confirmed any reversal and it awaits structural confirmation for any reversal even if it continues with its up move. In event of any downsides in immediate future, the levels of 7680 would be of critical importance.

All and all, modestly positive opening is expected today and the Markets are expected to continue with its up move, at least in the initial trade. We continue to reiterate caution in the short-medium term and therefore also reiterate that exposure in the Markets should be kept limited. Given the nearly oversold nature of the Markets, shorts should be avoided and any dips should be utilized to make modest purchases. Overall, continuance of caution is advised in 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

Daily Market Trend Guide -- Monday, November 16, 2015

MARKET REPORT                                                                                   November 16, 2015

Markets saw no respite from the weakness and continued to wear a bearish tone on Friday as it ended yet another day with losses. The Markets saw near gap down opening as it opened quite lower than its previous Close after trading somewhat in a range in the morning trade, slipped further in the late morning trade for form its intraday low of 7730.90. It saw somewhat getting stabilized as it spent the first half of the session recovering from those lows. Thereafter, the session continued virtually directionless as the Markets traded sideways in a very narrow trajectory and in a much capped range. It headed nowhere and it did not recover as well from its lows. It finally settled the day at 7762.25, posting a net loss of 62.775 points or 0.80% while forming a sharply lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 16, 2015

The Markets have ended with losses in 12 out of 14 sessions and this speaks of the nervousness of the Markets. In the process, it has come off nearly 500-plus points from its intraday high. Today as well, we are expected to see the Markets opening on a modestly negative note and trade negative, at least in the initial trade. However, the Markets are trading nearly oversold and we may see the pattern supports of 7680 levels coming into play once again. But if the Markets remain weak and test those levels, it is still some 60-80-odd point gap for a downside.

For today, the levels of 7775 and 7840 are immediate resistance levels for the Markets. The supports come in at 7730 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 30.1556 and it stands nearly oversold. It does not show any failure swing as well. There is bullish divergence seen as the NIFTY has formed a fresh 14-period low while RSI has not.  The Daily MACD remains bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 39.7419 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Weekly MACD too remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November shed over 1.50  lakh shares or 0.56% in Open Interest. This signifies some unwinding continued in the Markets. The NIFTY PCR stands at 0.71 as against 0.72 on the previous day. This too stands nearly oversold.

Coming to pattern analysis, the Markets continue to portray weakness on the Daily Chart and are likely to test its long term pattern support of 7680 levels. However, at the same time, it should also not be overlooked that the Markets are trading nearly oversold and the lead indicators suggest that the Markets might once again try and find support around these levels. Given this fact, there are chances that the Markets see some weakness but at the same time attempts to find support at lower levels and the downside now may remain limited beyond 7680 levels if at all they are tested.

Overall, the Markets remain weak on the Daily Chart and the technical structure suggests continuation of weakness in the immediate short term. However, given the fact that the Markets remain nearly oversold on Daily Charts, some amount of technical relief rally later today or in this week cannot be ruled out. Overall, while maintaining modest exposures and adequate liquidity cautious outlook should be continued in 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