Daily Market Trend Guide -- Monday, August 31, 2015

MARKET REPORT                                                                                              August 31, 2015

The Markets ended the day with modest gains though it pared most of its gains in a slide in the second half of the session. The Markets saw a stronger opening following positive global cues but the resistance zone mentioned in yesterday’s Daily Market Trend Guide played its part in the afternoon trade. After opening on a strong note, the Markets strengthened further in the late morning trade to form a day’s high of 8091.80. It maintained those gains until afternoon trade by trading sideways but it was second half of the session that did most of undoing. The Markets saw selling pressure from higher levels as expected and nearly pared all of its gains. It traded flat and even went on to form the day’s low of 7961.65, paring nearly 130-odd points from the high point of the day. Some last minute recovery was seen and the Markets finally ended the day at 8001.95, posting a net gain of 53 points or 0.67% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, AUGUST 31, 2015B

Though the Markets staged a pullback on Friday, it ended after paring most of its gains. Today as well, the Markets are likely to see a modestly negative opening and the triple bottom support zone of 7960-8000 will come into play once again. As mentioned in our previous editions of Daily Market Trend Guide, this zone continues to remain a major pattern resistance and the behaviour of the Markets vis-à-vis these levels will continue to affect the trend in the immediate short term.

For today, the Markets are likely to have 8090 as its immediate resistance levels. Supports come in at 7960 and 7910 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.2935 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI stands at 40.0211 and it has reached its lowest value in last 14-weeks which is bearish. It has also formed a fresh 14-week low whereas as NIFTY has not yet and this is Bearish Divergence. The Weekly MACD remains bearish while trading below its signal line.

On the derivative front, the NIFTY September futures have added over 9.40 lakh shares or 4.47% in Open Interest. This is a positive figure so long as bias of the Markets are concerned. The NIFTY PCR stands at 0.99 as against 0.94.

Coming to pattern analysis, the negative opening of the Markets are likely to cause the Markets open below their pattern resistance levels / zone of 7960-8000 levels. It is important to note once again that these are the levels that the Markets broke while coming down and therefore they are bound to act as resistance on its way up. It would be important for the Markets to move past and maintain itself above 8000-levels to prevent it from getting weak once again.

Overall, the Markets are yet to display any directional bias. However, going as per F&O data, we may not see much of the downsides but the amount of volatility is expected to remain significant. Further, Markets will also remain cautious towards GDP Data coming in today after market hours. Overall, while continuing with very cautious approach, very selective purchases may be made at lower levels while maintaining adequate liquidity.

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, August 28, 2015

MARKET REPORT                                                                                          August 28, 2015

Very much on expected lines, the Markets saw a sharp technical pullback yesterday as it opened positive, got stronger and ended the day with decent gains. Following positive global cues, the Markets saw a positive opening and traded with capped gains in the morning trade. The Markets got stronger as it surged ahead in the afternoon trade to form the day’s high of 7963.60. The Markets formed this high in the afternoon trade and thereafter again traded in sideways trajectory. The Markets spent the major part of the second half of the session in the sideways trajectory and maintained its gains. The session remained much stable than expected and the Markets finally ended the day at 7948.95, posting a net gain of 157.10 points or 2.02% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, AUGUST 28, 2015

Today as well, in absence of any negative global inputs, the Markets are likely to continue with its technical pullback. It is very much likely that the Markets see a gap up opening today and on similar lines that of yesterday, it would be critical for the Markets to maintain the opening gains. The gap created between 8060 and 8225 will pose resistance for the Markets on the upside.

For today, the levels of 8000 and 8060 are immediate resistance on the Charts. The supports come in at 7860 levels.

The RSI—Relative Strength Index on the Daily Charts is 35.6019 and it has just moved above from its oversold zone. It is neutral as it does not show any bullish or bearish divergence or any failure swings. The Daily MACD however continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have added over 43.38 lakh shares or 25.97% in Open Interest. The September series have begun with PCR of 0.94 as against 0.74 yesterday. There has been considerable amount of short covering yesterday accompanied with modest fresh longs.

Coming to pattern analysis, technically speaking the zones of 7960-8000 were likely to act as major resistance for the Markets while it pulls back. The reason was that it was a major triple bottom pattern support that the Markets broke on the downside and therefore it was expected to act as resistance. However, today’s gap up opening is likely to cause the Markets to open above these levels and therefore, it would be critical for the Markets to maintain levels above this. On the way up, the gap created between 8060-8225 will continue to offer resistance for the Markets for couple of days.

All and all, gap up opening expected again today but it is also likely that more of short covering continues. It would be important that we see more amount of fresh buying coming in as well as it would be essential for the Markets to maintain itself above 8000-levels in coming sessions. It is also likely that we see some paring of gains later in the day but more or less the gains are likely to be maintained. Overall, modest exposures with cautious optimism are advised for the day.

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