Daily Market Trend Guide -- Monday, August 03, 2015

MARKET REPORT                                                                                         August 03, 2015

The Markets ended the day on a robust note as the Markets opened higher, gathered more strength on  its way as it went ahead in the session and ended the day with decent gains. The Markets saw much better than expected opening once again and traded with decent gains in the morning trade. The morning trade remained more or less range bound sideways movement in the Markets. However, soon in the late morning session, the Markets gathered further strength and transformed itself into rising trajectory. For the rest part of the session, the Markets kept making fresh gradual highs and went on to form the day’s high at 8548.95. These levels were maintained and the Markets finally ended the day at 8532.85, posting a decent gain of 111.05 points or 1.32% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, AUGUST 03, 2015

Today, expect the Markets to open on a flat note and expect cues for its movement thereafter. In our Friday’s edition of Daily Market Trend Guide, we had mentioned the levels of 8550 to act as resistance as the Markets approaches the rising trend line support that it broke couple of days back. Today as well, the same trend line, which is now resistance, will continue to pose resistance in the range of 8550-8585 levels.

For today, the levels of 8575 and 8640 will act as immediate resistance for the Markets. The supports come in at 8470 and 8430 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.8450 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 the derivative front, the NIFTY August futures have added over 6.54 lakh shares or 3.94% in Open Interest. This indicates creation of fresh longs and the NIFTY PCR stands at 0.91 as against 0.85 on Friday.

Coming to pattern analysis, the overall structure remains similar to that of Friday. The Markets have broken the support of the rising trend line of the channel it had formed after forming lows of 8000-levels. This rising trend line, which was a support earlier will now act as resistance on its way up. This levels would be 8550-8580 and the Markets will continue to face resistance at these levels. Due to the rising nature of this trend line, the resistance levels too will keep going up which will prevent the Markets from a clear cut break out on the upside. It would, therefore be necessary, for the Markets to move past these levels with conviction. However, this may also induce some consolidation in the Markets.

Overall, we continue to reiterate the stance of caution in the Markets. The Markets would also react tomorrow to the RBI’s review of credit policy which is expected to keep the rate unchanged. The technical structure on the Daily Chart and the pattern analysis is unlike to give Markets a runaway rise. In case of any speedy up move, it would equally increase the chances of consolidation at higher levels. However, with the overall sentiment remaining intact, selective purchases with vigilant protection of profits at higher levels can be done.

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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Friday, July 31, 2015

MARKET REPORT                                                                                 July 31, 2015

The Markets remained positive on its expiry day of the July series and held on to its important support at Close levels while ending the day with modest gains. The Markets saw itself opening above its both 100-DMA and 200-DMA and remained above those levels for the rest of the session. After opening on a better note, the Markets strengthened further and went on to form the day’s high of 8458.90 by afternoon trade. However, the second half of session saw some volatility creeping in on account of rollovers. The Markets came off from its highs and pared nearly half of its gains. The second half of the session was spent in a sideways manner and the Markets finally ended the day at 8421.80, posting a net gain of 46.75 points or 0.56% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JULY 31, 2015

Expect the Market to open today on a flat to mildly positive note and continue with its up move. The July series have ended on a positive note and it is likely that the Markets continue with it pullback at least in the initial trade. The Markets are once again above all of its DMAs and it would be important to see that the Markets trades above these levels in order to avoid any temporary weakness from creeping in.

For today, the levels of 8460 and 8510 will act as immediate resistance levels for the Markets. The supports come in at 8400 and 8340 levels.

The RSI—Relative Strength Index on the Daily Charts is 49.2633 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, rollovers remain in line wit the 3-month average in NIFTY and stocks alike. The NIFTY August series added over 39.87 lakh shares or 31.60% in Open Interest. The NIFTY PCR for August series stands at 0.85.

Coming to pattern analysis, the Markets have breached its lower support trend line of the channel that it had formed after making lows at 8000-levels. Having said this, though the Markets have managed to hang on to all of its DMAs  at Close levels, this very same trend line which is breached on the downside is likely to act as resistance going ahead. Though the Markets may continue with its pullback, this pattern is likely to pose resistance around 8500-8550 levels. It would be imperative for the Markets to move past these levels otherwise  we will again see the interruption in the uptrend around these levels.

Overall, the Markets may open with mild gains and continue it uptrend at least in the initial session and we will also continue to see selective stock and sector out performance. The levels of 8400 would be an important support and its breach can see the Markets going to 8340 levels. The behaviour of the Markets vis-à-vis the levels of 8400-levels would be crucial to watch out for. Select purchases may be made with high vigilance over protection of profits 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

Consultant to:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com