Daily Market Trend Guide -- Monday, September 07, 2015

MARKET REPORT                                                                             September  07, 2015

The Markets continued to wear a bearish undertone once again on Friday following weak technicals as it opened lower and weakened further to end the day with losses. Markets opened lower on expected lines following global weakness and spent the morning session trading in sideways trajectory while continuing to trade with losses. The Markets remained more or less in sideways trajectory in a very narrow range making no attempts to recover in the first half of the session. The second half saw some more weakness creeping in as the Markets slipped further to testing its previous lows and forming the low point of the day at 7626.85. No major recover was seen and the Markets finally settled the day at 7655.05, posting a net loss of 167.95 points or 2.15% while forming lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, SEPTEMBER 07, 2015

Expect the Markets to open on a modestly negative note and look for directions. The Markets currently have a bearish technical structure but there are two things that can cause a temporary technical pullback. First, it trades near important short term support zone and second; the Markets are currently nearly oversold. However, the overall build up of the Markets on technical charts show strong possibilities of any technical pullback getting sold into.

For today, the levels of 7710 and 7740 will act as immediate resistance levels for the Markets. The supports come in at 7620 and 7550 levels.

The RSI—Relative Strength Index on the Daily Chart is 31.5977 and trades very near to oversold territory. It does not show any failure swing but the NIFTY has formed as fresh 14-day low but RSI has not and this is bullish divergence. The Daily MACD continues to remain bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 33.7965 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Weekly MACD  is bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have added over 5.06 lakh shares or 2.23% in Open Interest. This point towards addition of shorts in the derivative segment. The NIFTY PCR stands at 0.96 as against 0.99 on previous day.

Coming to pattern analysis, the Markets are struggling to find base near current support levels. After forming lows of 7667 on 25^th August, the Markets did pulled back. However, it retraced again after it failed to fill up the gap it created on 21^st August. The gap still persists and the zone above 7960-8000 will continue to pose considerable resistance to the Markets in days to come. Currently the Markets may attempt a pullback given its nearly oversold condition. Another reason that can cause a pullback is that the Markets are attempting to take support on 100-DMA on the Weekly Charts as well. However, given the lead indicators and the F&O data, we still have the possibility of any good technical pullback being sold into.

All and all, the Markets currently trade at very good and important short term support levels. There are chances that post modestly negative opening, we may see some improvement in the Markets as we go ahead in the session. If the Markets continue to retrace, it would get oversold temporarily and therefore some technical pullback cannot be ruled out. It is advised to continue to stay away from taking any major exposures as the bottoms have not been found even on temporary basis. Heavy caution is advised in the Markets today even if it attempts to pullback.

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 -- Friday, September 04, 2015

MARKET REPORT                                                                                 September 04, 2015

The Markets saw a technical pullback on expected lines as it opened higher, strengthened further and ended the day with gains, though on lower volumes. The Markets saw a decently positive opening it remained in sideways trajectory in the first half of the session, though it successfully continued to maintain its opening gains. At one point in the afternoon, the Markets did lose some of its gains but the second half saw the Markets strengthening again. It moved upwards further and went on to form the day’s high of 7845.60. Markets slightly came off from these levels but maintained bulk of its gains. It finally settled the day at 7823.00, posting a decent gain of 106 points or 1.37% while forming a lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, SEPTEMBER 04, 2015

Expect the Markets today to open on a modestly negative note and look for directions. The Markets have vigorously attempted to form a base yesterday but it is not completely out of woods as bulk of yesterday’s rise has come on short covering and on lower participation and volumes. For the Markets to form a base at current levels successfully, it will have to see some fresh longs with good amount of participation to help it sustain it.

For today, the levels of 7850 and 7925 will act as immediate resistance levels for the Markets. The supports come in at 7750 and 7670 levels.

The RSI—Relative Strength Index on Daily Charts is 36.0036 and it remains neutral as it shows no bullish or bearish divergence or any failures wings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have shed 92,400 shares or 0.41% in Open Interest. This indicates net short covering in the Markets. Fresh longs have been seen at lower levels but they have been lesser in amount as compared to short covering.

Coming to pattern analysis, the Markets have attempted to form a base near its pattern support levels of 7667 levels. The up move that we saw yesterday have been purely technical in nature as the Markets were trading nearly “oversold” yesterday as per lead indicators. The pullback that we saw yesterday was imminent but it would be more important to see if the Markets successfully forms a  base around these levels. For it to form a base, any more up moves need to be accompanied with fresh longs and not just short covering and also with good participation.

All and all, we have not moved past all global events and the Markets are once again slated to open modestly negative today. Given this fact, the Markets are likely to continue to remain subdued and will see itself trading in a given range with some amount of volatility. Fresh purchases at any lower levels can be made but in modest quantities as the Markets have just attempted a reversal and has not confirmed it. While remaining modestly positive, caution should be exercised at with any up move.

 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