Daily Market Trend Guide -- Monday, November 02, 2015

MARKET REPORT                                                                                    November 02, 2015

Markets saw correction continuing as it traded very much on dotted lines and ended yet another day with losses while testing its important pattern supports. The Markets opened on a flat note and trade sideways in the morning trade while briefly dipping into negative for a very brief period. It saw some strength coming in the first half of the session as it perked up a bit and formed its day’s high of 8146.10. The Markets maintained these gains for a very short time as in the afternoon, slowly pared its gains to trade flat. It dipped into negative and in the second half of the session slipped further and went on to form the day’s low of 8044.40. The Markets came off nearly 100-odd points from its intraday high tested its important pattern support. It did make a very feeble attempt to recover but finally settled the day at 8065.80, posting a net loss of 45.95 points or 0.57% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 02, 2015

In Friday’s edition, we had expressed possibilities of the Markets testing the pattern supports of 8050 levels. Today as well, it keeps the analysis more or less on similar lines. Today expected subdued opening will again cause the Markets to open near its pattern supports. It would be critically important for the Markets to keep its head above this level. Any breach will cause the Markets to test its other pattern support which coincides with its 50-DMA as well.

For today, the levels of 8100 and 8125 will act as immediate resistance levels. The supports come in at 8050 and 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.5006 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD on the Daily Chart is bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 46.2555 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Weekly MACD is bullish as it trades above it signal line.

On the derivative front, the NIFTY November futures have added over 9.49 lakh shares or 5.32% in Open Interest. This is clear indication of shorts being created afresh. The NIFTY PCR stands at 0.84 as against 0.86.

Coming to pattern analysis,  as mentioned in the opening paragraph, it would be important for the Markets to keep its head above the levels of 8050. Any downward breach will see the Markets testing another pattern support which also coincides with its 50-DMA. However, if we read the technicals on both Daily and Weekly Chart, it is very much likely that the Markets out performs its Asian peers and we see very limited downsides as such. Even if the Markets consolidate for a day here or there, the overall weekly charts indicate some amount of resilience at lower levels.

Keeping the overall reading of Daily and Weekly Charts as well, we expect the Markets to resist to relative downsides and remain resilient at lower levels. It is advised to refrain from shorts and continue to utilize the downsides to make selective quality purchases. However, with the Markets continuing to remain in corrective mode, such purchases should be kept limited. Overall, cautious optimism 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 -- Friday, October 30, 2015

MARKET REPORT                                                                                       October 30, 2015

The Markets wore a bearish outlook throughout the session yesterday as it continued to end the day with losses on the expiry day of the October series. The Markets opened on modestly lower note but slipped further to align itself with global markets. However, the losses were as such limited as the Markets spent the first half of the session trading in sideways trajectory while attempting to limit its losses. It was the second half that saw the Markets weakening further. The Markets then pared some more ground as it gradually made lower lows. It went on to form the low point of the day at 8098 in the last hour of the trade. No major recovery was seen and the Markets settled the day at 8111.75, posting a net loss of 59.45 points or 0.73% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, OCTOBER 30, 2015

Markets have remained particularly dominated with rollovers, especially since last two sessions. Today, we can expect the Markets to open on a flat note and may trade in a range in the initial session. The Markets have slipped back into its broad consolidation zone of 8050-8220 and it would now be a while as the Markets will consolidate to attempt an up move again. In event of any weakness, the levels of 8050 would again become critical to watch out for.

For today, the levels of 8150 and 8210 are immediate resistance levels for the Markets. The supports come in at 8050 and 8023 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.6514 and it has reached its lowest value in last 14-days which is bearish. The RSI has set a  fresh 14-period low where as NIFTY has not yet and this is Bearish Divergence. As expected in our yesterday’s edition, the Daily MACD has reported a negative crossover and it is now bearish as it trades below its signal line.

On the derivative front, the NIFTY and Market Wide rollovers have remained strong and above its last 3-series average. The NIFTY November series began adding Open Interest of 42.06 lakhs shares or 30.88% and has begun the series with NIFTY PCR at 0.86 as against 1.04.

Coming to pattern analysis, as we had mentioned in our previous edition of Daily Market Trend Guide, the Markets have slipped back into the trading range that it was previously in the month of October. This range is bit broad ranging nearly 170-odd points (8050-8220) and therefore, it can once again cause the Markets to move and oscillate within this range. In event of any weakness, it  would not be surprising if the Markets tests its lower bottoms but in the same breadth, it is very much unlikely that the Markets will see any significant downside breach in the immediate short term.

Overall, the Markets may remain subdued and range bound but is not likely to see any significant breach on the downsides. However, given the fact that the Markets are back into the broad trading range, some directionless oscillation within this range may not be ruled out. It is advised to continue to refrain from shorts and continue to utilize the dips to make modest quality purchases.

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