Daily Market Trend Guide -- Monday, October 05, 2015

MARKET REPORT                                                                            October 05, 2015

Markets had a day of consolidation on Thursday as it opened near its key resistance zone and during the day, pared its opening gains to end the day on a flat note. The Market saw a better then expected positive opening and formed its intraday high of 8008.25 in the morning trade after trading in a capped range. The Markets soon pared all of its opening gains, very much on expected lines as the key resistance zone of 7960-8000 played its part, and it traded flat near its previous Close. The Markets thereafter traded in sideways trajectory for the rest of the session trading in a very narrow and capped range. While forming the day’s low of 7930.65 in the afternoon trade, the Markets remained sideways in a 20-odd point range. While remaining directionless, the Markets finally ended the day at 7950.90, posting a nominal gain of 2 points or 0.03% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, OCTOBER 05, 2015

Today’s analysis continues to remain on similar lines that of Thursday. Reason being, the Markets are slated to open on a positive note and once again open near its key resistance zone of 8000-mark. Having said that, the Markets have multiple resistance zone ahead of 8000-mark which include 8061, the pattern resistance created by the Gap that the Markets created in the early September. Having said this, once again, it would be paramount importance that the Markets maintain its gains post opening. The intraday trajectory that the Markets form post opening would once again be of critical importance.

For today, the levels of 8000 and 8061 will be immediate resistance levels for the Markets. The supports come in at 7910 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.8484 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high whereas NIFTY has not yet, and this is Bullish Divergence as well. The Daily MACD remains bullish as it continues to trade above its signal line. On the Weekly Charts, the Weekly RSI is 23.2360 and it remains neutral as it does not show any bullish or bearish divergence or any failure swing. The Weekly MACD remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY October series have added over 4.39 lakh shares in Open Interest. The NIFTY PCR stands at 0.91 as against 0.92 on Thursday.

Coming to pattern analysis, the Markets still continue to trade within a broad trading range that it has formed after the breakdown on the lower side in the early September. The Markets still continues to face stiff pattern resistance near the 7960-8000 mark followed by 8061 because of the breakaway gap that it created post break down from the Head and Shoulder Formation in early September. Having said this, as mentioned, it would be critical importance for the Markets to move past these key pattern resistance zones to try and confirm the reversal of trend. Until this happens it will continue to trade in this current trading zone. Even on the Weekly Charts, the 8000-mark is a important pattern resistance.

Because of all this, it becomes even more important for the Markets to maintain its opening gains and capitalize on it. Until these pattern resistances are cleared, the Markets would continue to remain vulnerable to sell-offs and profit taking bouts at higher levels. No significant fresh purchases should be made until these levels are crossed and all such up moves should be utilized in protecting profits. Fresh purchases, as usual, should be kept very selective and limited.

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, October 01, 2015

MARKET REPORT                                                                                September 30, 2015

The Markets witnessed a steady up today after opening on a positive note and it ended the day with decent gains as well. The Markets saw a better than expected opening in the morning as it opened on a higher note. It spent the first half of the session trading in a narrow range but continued to maintain its opening gains. It was the second half of the session that the Markets saw some more strength coming in. The Markets went on to form the day’s high of 7957.70 towards the end of the session. It did form these highs but overall it continued to remain in the broad rectangle trading range that it has been in since couple of weeks. Markets maintained these levels and finally ended the day at 7948.90, posting a decent gain of 105.60 points or 1.35% while forming a higher top and much higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, OCTOBER 01, 2015

The Markets are at very critical juncture today. We can expect the Markets to open on a decently positive note. However, this expected but imminent positive opening will see the Markets opening or trading near its very critical resistance zone of 7960-8000 levels. The Markets have a very critical and multiple pattern resistances at 7960-8000 levels and further and it would be critical to see if the Markets moves past them successfully. It would take Markets good amount of participation while on its way up to make a sustainable attempt to reverse its trend.

For today, the levels of 8000 and 8060 will act as immediate resistance for the Markets. The supports come in at 7875 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.7506 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high but NIFTY has not yet and this is Bullish Divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have shed over 1.71 lakh shares or 0.91% in Open Interest. Individually speaking, this figure is insignificant but it has certainly shown some amount of short covering involved in the trade yesterday.

While looking at patterns, pattern analysis makes it evident that the Markets still continue to remain in a broad trading range and have currently closed below its key resistance levels as of yesterday. The Markets face formidable multiple resistances ahead in terms of the breach supports on its way down and the Gap that it created couple of weeks back. All these will act as major pattern resistances on its way up. The Markets are likely to face serious resistance at 8000-8060 levels. It will have to move past these levels and attempt to fill up the gap that it had created. In nutshell, though the Markets have shown decent up moves it still remains much in the woods and it requires up moves with conviction and volumes to move  past its key pattern resistances.

All and all, it is pretty evident that we are set to see a decently positive opening but at the same time also acknowledge the fact that the Markets will trade very near to its important and multiple pattern resistances. This will continue to keep the Markets vulnerable to seeing profit taking at higher levels.  Also when today is the last working day of the Week once again, we can see some consolidation at higher levels. It is strongly advised to use any available up moves to book and protect profits at higher levels while continuing to keep purchases at moderate 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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com