Daily Market Trend Guide -- Wednesday, January 06, 2016

MARKET REPORT                                                                                       January 06, 2016

Markets remained choppy and traded precisely as analyzed. In a range bound session, the rising trend line continued to act as resistance as the Markets ended the day with minor losses. The Markets saw a stable opening but formed its intraday high of 7831.20 in the early minutes of the trade. Soon after this, the Markets gradually pared its gains to trade flat. By early afternoon trade, the Markets slipped once gain into negative while forming the low point of the day at 7763.25. However, the Markets attempted to recover its losses and at one point it traded flat once gain. The second part of the session remained much capped as the Markets oscillated in a very narrow range. It finally settled the day at 7784.65, posting a minor loss of 6.65 points or 0.09% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, JANUARY 06, 2016

Today’s analysis continues to remain more or less similar on yesterday’s grounds. We can expect the Markets to open on a flat note with a modestly bearish note and look for directions. The Markets have resisted today to the upward rising trend line as evident on the Charts. This level will continue to resist even if the Markets see any technical pullback. This level, until crossed on the upside, will continue to pose as a major pattern resistance in the immediate short term.

For today, the levels of 7820 and 7845 will act as immediate resistance levels for the Markets. Supports come in at 7750 and 7705 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.5712 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trade above its signal line.

On the derivative front, NIFTY January series have gone on to add another over 4.75 lakh shares or 2.35% in Open Interest. This signifies some more addition of short positions in the Markets.

While having a look at pattern analysis, we had mentioned in our yesterday’s edition that he Markets have breached a pattern support which existed in form of a rising trend line. Now, it was all likely that that pattern / rising trend line would act as resistance. Yesterday, precisely in line with this observation, the Markets formed its intraday high below this level and therefore this level continued to pose resistance.  While keeping today’s analysis similar on yesterday’s lines, this rising trend line will continue to act as resistance in the immediate short term so long as the Markets trade below that. For any up move to occur, the Markets will have to move past these levels. Until that happens, all we would see would be mere technical pullbacks which would always remain susceptible to intermittent selling bouts.

All and all, the Markets, though are stable than a day before, are not completely out of the woods. Any sustainable up move shall occur only above 7850 levels and until that happens the Markets are likely to oscillate in a range even in event of technical pullbacks. It is advised to continue to remain modest on exposures while maintaining 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 -- Tuesday, January 05, 2016

MARKET REPORT                                                                                January 05, 2016

Following global weakness, the Markets had a thoroughly disappointing session as it opened on a resilient note but then ended the day with a deep cut in line with its peers. The Markets saw a lower opening but it did show resilience as well. At one point of time in the morning trade, the Markets had managed to recover chunk of its opening losses while it formed its intraday high of 7937.55. However, it was the rest of the session that proved to be grossly disappointing one. The Markets started to pare recovered points once again and this time remained in falling trajectory for the rest of the session. While remaining in falling trajectory, the Markets kept making gradual lows. It went on the breach the important intraday supports while it formed its day’s low of 7781.10. It finally settled the day at 7791.30, posting a net loss of 171.90 points or 2.16% while forming a lower top and sharply lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JANUARY 05, 2015

Markets may see some breather from the weakness that it saw yesterday but at the same time, some amount of bearish undertone is likely to persist for the immediate short term. The Markets are set to open on a quiet note and look for directions. It has breached certain levels yesterday and on the way up today, they are likely to pose some resistance to the Markets.  The Markets have penetrated the support of rising trend line and this is likely to pose resistance to the Markets going ahead.

For today, the levels of 7840 and 7875 will act as immediate resistance for the Markets. The supports come in at 7740 and 7715 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.9819 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above it signal line.

On the derivative front, the NIFTY January series have added over 8.04 lakh shares or 4.14% in Open Interest. This clearly indicates addition of fresh shorts in the system.

Coming to pattern analysis, we have been mentioning often in our previous edition of Daily Market Trend Guide that the levels of 100-DMA and 8000, have remained sacrosanct. These levels once again continued to remain major resistance for the Markets. In yesterday’s session, the Markets have violated one important pattern support. This pattern support is in form of a rising trend line drawn from the lows of the Markets which it formed in September 2015. The Markets have violated this support and therefore in event of any pullback, this level might pose some resistance to the Markets.

All and all, volatility and uncertainty will rule the Markets in the immediate short term. With the yesterday’s downside, the structure of the Charts have somewhat got damaged to some extent and it will a while by the time the Markets gathers its momentum on the upside once again. The levels of 7840-7860 will continue to pose resistance in event of any pullback. It is advised once again to remain very selective on stocks and curtail the overall exposures in the Markets for the immediate short term.

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