Daily Market Trend Guide -- Wednesday, November 18, 2015

MARKET REPORT                                                                            November 18, 2015

The Markets had a little volatile session yesterday as it oscillated in a 60-point range to finally end the day with modest gains. The Markets saw a quiet and modestly positive opening but it traded in a narrow range in the positive trajectory in the morning trade. However, the first half of the session saw the Markets drifting on the downside and by afternoon, the Markets pared all of its gains to trade in the negative territory. It went on to slide some more to form the day’s low of 7793. It was the second half of the session that saw the Markets rebounding very sharply. It not only came off its lows but traded back in positive territory. Further to this, it went on to form the day’s high of 7860.45 in the final hour of the trade. After coming off a bit from there, the Markets finally settled the day at 7837.55, posting a net gain of 30.95 points or 0.40% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, NOVEMBER 18, 2015

Analysis for today remains more or less on similar lines that of yesterday. Reason being, the Markets are expected to open on a quiet note and it has been displaying lack of conviction and participation while pulling back. This may keep the Markets a range movement with some intermittent downsides as well. Today, post quiet opening, the intraday trajectory that it forms and the levels of yesterday’s low would be important to watch out for.

For today, the levels of 7860 and 7910 are immediate resistance levels for today. The supports come in at 7790 and 7745 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.6376 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have further shed over 1.56 lakh shares or 0.91% in Open Interest. The NIFTY PCR stands a t0.72 as against 0.71 levels. The reduction of Open Interest conveys one fact that there is clear discomfort in the Markets at the levels of 7750-7800 zones as it gets nearly oversold by then. However,  it also points out to a fact that the OI drops with any upside and this also shows that though the Markets are supported by short covering at the lower levels, it certainly lacks the conviction of a fresh buying.

Coming to pattern analysis, the Markets have so far held the pattern support levels of 7680 as it has attempted a rebound / pullback from 7714 levels. However, as mentioned above, the technical pullbacks have seen lower volumes and also a reduction in OI. This keeps the Markets little vulnerable to some more range bound movements and some intermitted selling bouts. However, so long as the Markets rule above 7680 levels, there wont be any significant downward breach in the Markets.

Overall, though the Markets have been little less strong that what it should have been otherwise during a technical pullback, it has not displayed any structural technical breach on the Charts. However, given the lack of conviction on the upside, we continue to reiterate to restrict fresh buying only to selected stocks and keep high vigil over existing profits, if any. 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 -- 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