Daily Market Trend Guide -- Friday, November 20, 2015

MARKET REPORT                                                                          November 20, 2015

The Markets saw a day ended with decent gains as it opened strong, got stronger and ended the day near its high point the day with gains. Though this gains came purely on account of short covering. The Markets saw a positive opening and expected lines and more importantly maintained on those gains. It successfully capitalized on it going ahead in the session. After getting stronger in the morning trade, the Markets traded in sideways trajectory soundly protecting its gains. In the second half of the session, the Markets kept on posting gradual highs as it formed its high point of the day at 7854.90. It finally ended the day at 7842.75, posting a net gain of 110.95 points or 1.43% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, NOVEMBER 20, 2015

Though the Markets have rebounded yesterday, the rise has come in purely on account of short covering. The Markets continue to trade in a broad range and today we can expect the Markets to open on a flat to modestly negative note. The Markets are expected to remain bit weak in coming days unless it moves out from a broad trading range that it has formed over couple of days. Today’s opening and the intraday trajectory formed thereafter will play a crucial role to determine the trend. The technical indicators and overall structure suggest some minor weakness to continue in the Markets.

For today, the levels of 7860 and 7910 will act as immediate resistance for the Markets. The supports come in at 7765 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 41.7189 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 derivative front, the NIFTY November futures have shed over 9.59 lakh shares or 5.49% in Open Interest. This is a clear evidence of short covering in the Markets yesterday. The NIFTY PCR stands at 0.79 as against 0.72 yesterday.

Coming to pattern analysis, the Markets have not shown any significant pullback after forming recent lows. The pullbacks have met with subsequent selling on the other day and this phenomenon has formed a broad trading range / congestion on the Daily Charts. The Markets have certainly attempted to form a bottom but it has not confirmed it so far. Also, all the pullbacks have resulted in to heavy reduction in Open Interests. For the Markets to confirm the pullbacks, it will need up moves supported by fresh long positions. It is important to note that any short term weakness, if at all any, will increase the possibilities of the Markets testing its pattern supports of 7680.

Overall, currently the Markets continue to remain much in the no-trade zone. So far as taking a view is concerned, it is much evident that the Markets are completely lacking directional bias and are oscillating in a given zone. Though the lower levels are met with short covering, it is not being supported by buying as such. We continue to reiterate to keep the exposures very selective and limited while continuing to adopt a cautious outlook 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

Daily Market Trend Guide -- Thursday, November 19, 2015

MARKET REPORT                                                                            November 19, 2015

The Markets took a bearish undertone, especially in the second half of the session as it ended the session with a decent cut. The Markets saw a quiet opening on expected lines and traded subdued and in a capped range in the morning trade. It spent the entire first half of the session was spent in the sideways trajectory trading in a very narrow and capped range. Markets headed nowhere in the first half and it just consolidated in a sideways trajectory. It was the second half that dealt a blow to the Markets. The Markets saw a sudden and sharp paring of gains in the second half and this continued until the end of the session. The Markets went on to form its intraday low of 7725.05 in the last hour of the trade. It traded sideways again and no recovery of any magnitude was seen.  Markets finally settled the day at 7731.80, posting a net loss of 105.75 points or 1.35% while forming a lower top and sharply lower bottom on the Daily Charts.

MARKET TREND FOR THURSDAY, NOVEMBER 19, 2015

Technical rebound is likely once again today after yesterday’s sharp decline. Markets are likely to open on a positive note and look for directions. The technical structure remains somewhat weak and it would be critically important to see if the Markets maintain its opening gains and capitalize on it as we go ahead in the session. Markets are not completely out of woods. Though technical rally cannot be ruled out today and in couple of days ahead, the Markets are not completely out of woods until it confirms its bottom.

For today, the levels of 7785 and 7840 will act as immediate resistance for the Markets. The supports come in at 7725 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 32.1928 and it does not show any failure swing. The NIFTY has formed its fresh 14-day low but RSI has not and this is bullish divergence. The Daily MACD remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY November futures have added over 6.52 lakh shares or 3.84% in Open Interest. There has been addition in short positions with yesterday’s decline. The NIFTY PCR stands at 0.71 as against 0.72.

Coming to pattern analysis, the Markets once again moved yesterday towards one of its important pattern support levels of 7680. So far, the Markets continues to trade above this critically important support level of 7680 and today’s positive opening is likely to keep Markets well above that. The nearly oversold nature of the Markets and the immediate indications from the lead indicators suggest that the Markets will once again have relief technical rebound from these levels. However, if we extend the reading to couple of days more ahead of us, it is equally likely that the Markets once again see some selling pressure from higher levels.

Overall, technical rebound is likely but the Markets are expected to continue to remain in a broad range. It will certainly see a technical pullback and as of now it has not breached any of its important support levels as well. However, the key would be to see if the Markets build up on its opening gains. Also in coming days, it would be equally important to see if the Markets forms and later confirms its bottom. Until then, it is most likely that the Markets trade in a broad range remaining vulnerable to selling pressure at higher levels.

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