Daily Market Trend Guide -- Friday, January 15, 2016

MARKET REPORT                                                                                       January 15, 2016

Markets traded precisely on analyzed lines as it opened lower but at the same time recovered and ended the day with just minor losses while continuing to resist to 7540 levels. The markets saw a gap down opening once again following global weakness but formed its intraday low of 7443.80 in the early minutes of the morning trade. Thereafter, the Markets transformed itself into rising trajectory as it recovered from the low points of the day. It not only recovered all of its losses but went on to trade in the positive territory. By afternoon trade, the Markets formed its intraday high of 7604.80, rising once again over 160-odd points from the low point of the day. However, it came off in the late afternoon trade and settled the day at 7536.80, posting a net loss of 25.60 points or 0.34% while forming higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JANUARY 15, 2016

The markets are likely to see a flat to mildly positive opening and once again place themselves at a critical juncture. The likely opening levels will see the Markets opening above 7540-7550 levels and it would be once again critically important for the Markets to maintain itself above these levels. It seems that the Markets have formed its bottom for the immediate short term but at the same time, it is likely that all we see is merely a technical pullback while continuing to remain vulnerable to possible downsides in coming weeks.

For today, the levels of 7575 and 7610 are immediate resistance levels for the Markets. The supports come in at 7475 and 7440 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.92.90 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY January futures have added over 1.58 lakh shares or 0.71% in Open Interest. Shorts continue to exist in the system. NIFTY PCR stands at 0.83 as against 0.80 yesterday.

While having a look at pattern analysis, the Markets have breached the important pattern support of 7540-7550 levels thrice and have pullback from the fresh lows that has made. If we take a immediate short term view, the likely opening levels for today will see the Markets opening above these levels. So long as the Markets maintain itself above these levels of 7540-50, it may see some technical pullback and mild relief rallies. The nearly oversold nature of the Global Markets and likely technical pullbacks there will see our Markets posting some mild technical rallies as well. However, if we take a short to medium term view, the overall structure of the Charts remain bearish and even with the possible technical pullbacks, we would continue to remain vulnerable to the sell offs in the short to medium term.

All and all, given this scenario, we advice to make selective purchases and remain stock specific. It would be important to keep the exposures at moderate levels and even more important to exit with the rallies, if any, and protect profits vigilantly at higher levels. Continuance 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, January 14, 2016

MARKET REPORT                                                                                      January 14, 2016

Markets saw tremendous amount of volatility yesterday after its plunged to a fresh 52-week lows and then recovered later in a V-shaped recovery after swinging 165-odd points on either side. The Markets saw a positive and stable opening and formed its intraday high of 7590.95 in the morning session of the trade. The Markets remained in sideways trajectory in the first hour and half of trade but saw sudden weakness creeping in thereafter. The Markets saw a near vertical fall in the early afternoon trade as it erased all of its morning gains to dip in the negative. It saw sharp weakness being extended as it saw the low point of the day at 7425.80, coming off nearly 165-odd points from the high point of the day. However, it was the late trade that saw an equally sharp recovery and recovered very sharply to trade back in the green. It finally ended the day at 7562.40, posting a modest gain of 52.10 points or 0.69% while forming a similar top but lower bottom on the Daily Bar Charts.

 

MARKET TREND FOR THURSDAY, January 14, 2016

The session is all likely to remain very much volatile today with the levels of 7540 playing the important role once again. Today, we can expect a negative start to the Markets once again. There are two things to consider at this time. With the levels of the lower gap down opening expected, the Markets will once again get nearly oversold and secondly, the opening is likely to be once again below the levels of 7540 and therefore the levels of 7540 will be critical to watch out for once again.

For today, the levels of 7590 and 7645 are immediate resistance levels on the Daily Charts, the supports would exist at 7480 and 7430 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.1729 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stands bearish as it continues to trade below its signal line. On the Candles, a long lower shadow occurred which typically suggests bottom formation for the immediate short term.

On the derivative front, the NIFTY January futures have added over 4.13 lakh shares or 1.90% in Open Interest.  The NIFTY PCR stands at 0.80 as against 0.78 yesterday. It should be noted that in absence of any major net FII sell figure, there is large amount of short position that exists in the system.

Coming to pattern analysis, we can have two types of readings; for the immediate short term and the other one for the medium term. If we take the immediate short term view, we can fairly expect that the Markets will show some amount of resilience at lower levels and we can expect a short – covering led technical pullbacks of the kind we witnessed yesterday. At the same time, the levels of 7540-7600 will continue to act as major resistance zone for the Markets in the immediate medium term. So, there are fair chances that we see resilience at lower levels  in the coming day, but see the Markets consolidating at somewhat higher levels with a negative bias.

All and all, so far as today is concerned, there are mild chances that we see the Markets improving as we go ahead in the session. There are chances that even if the rallies are not supported by major buying, some short covering led rallies can be seen. In event of any downsides, shorts should be avoided and very selective stock specific purchases may be made.  In event of pullbacks, such pullbacks should be utilized to protect profits while maintaining a very 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