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Thursday, October 4, 2012

Daily Market Trend Guide -- Thursday, October 04, 2012

MARKET TREND FOR TODAY

The Markets continued to inch up wards yesterday and might have ended the day with modest gains, but it has continued to remain in OVERBOUGHT range with continuing Bearish Divergence on the Daily Charts.

For today, expected the Markets to open on a flat to mildly negative note and look for directions. Given the structure of the Charts and going by Pattern Analysis, the correction in the Markets is now long overdue and almost imminent as the structure of the Markets on Daily Charts is getting unhealthy. We can expect a flat to mildly negative opening and also we can expect the Markets to remain in falling trajectory going ahead in the session.

For today, the levels of 5750 continue to be immediate resistance with the supports coming in at 5680 and 5640 levels.

The RSI--Relative Strength Index on the Daily Chart is 73.78. The NIFTY has set a new 14-day high again, but RSI has not and this is BEARISH DIVERGENCE. This reading is continuing since last 3 sessions and this provides all technical reasons for the Markets to have a long overdue correction.

Though both NIFTY and Stock futures have shown addition in Open Interest, the trend has shown a mixed pattern so far as Index components are concerned.

Having said this, we continue to give the same reading and reiterate our analysis that aggressive buying in the Markets should be avoided at these levels. The Pattern Analysis and the technical indicators strongly point towards imminent correction, even though a minor one. The Markets shall get unhealthy if it continues with this structure on the Charts. So, continuing with our yesterday's analysis, highly selective approach with cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, October 3, 2012

Daily Market Trend Guide -- Wednesday, October 03, 2012

MARKET TREND FOR TODAY October 03. 2012

The Markets remained overbought on Monday, but still had a very capped session witnessing bouts of short covering and had a session with ended with modest gains. The Markets opened on a moderately positive note but moved in a very capped range in the first half of the session, moving around its previous close. The Markets, however, saw some short covering in the later part of the session as it move up a bit, and gave its intraday high of 5722.95. It again moved around to levels in a very tight and capped range and finally ended the day at 5718.80, posting a modest gain of 15.50 points or 0.27%, while forming a lower top and higher bottom on the Daily High Low charts.

For today, expect the Markets to have a negative opening and get into further consolidation / minor correction mode which is long overdue as it continues to remain “Overbought” with bearish divergence. The Markets are expected to open negative and we may see minor correction creeping into the Markets.

For today, the levels of 5675 and 5640 are immediate supports on the Charts with the levels of 5750 acting as immediate top.

The RSI—Relative Strength Index on the Daily Charts is 73.0590. The NIFTY has set a new 14-day high but the RSI has not and this is BEARISH DIVERGENCE on the Charts. The Daily MACD continues to trade above its signal line.

Though the NIFTY and Stock futures have continued to add in Open Interest over last few days, in the Monday’s session some shedding of Open Interest too was observed. This signifies that the Markets are getting weary at these levels and some technical correction can be expected.

Having said this, for today, it is strongly advised to refrain from aggressive buying and highly stock specific approach is advised. It is likely that the Markets may open negative, may recover a bit also, but with any correction, given this structure of the chart, the rise would be unhealthy for the Markets given the pattern analysis. Some correction is imminent and the Markets are NOT poised for any runaway rise until that happens. Overall, continuance of cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, October 1, 2012

Daily Market Trend Guide -- Monday, October 01, 2012

MARKET TREND FOR TODAY October 1, 2012

The Markets had a relatively buoyant session on Friday as it opened positive and remained positive throughout the session and also ended the day on a positive note . The Markets opened on a strong note and gave its intraday high of 5735.15 in the morning trade. However, post giving this high, the Markets gradually drifted from its day’s high in the rest of the session. It finally ended the day at 5703.30, still posting a decent gain of 53.80 points or 0.95%. It formed a higher top and higher bottom on the Daily High Low Charts.

Today, expect the Markets to open on a flat note and look for directions. With all indicators pointing towards consolidation or impending minor correction, the Markets are likely to see a capped range on the upside. The intraday trajectory would be important for today and the Markets are strongly expected to either consolidate or see a minor correction.

For today, the levels of 5710-5750 shall continue to act as immediate resistance for the Markets and the immediate supports are at 5630 levels.

The RSI—Relative Strength Index on the Daily Chart is 72.1770 and it does not show any failure swing. However, the NIFTY has set a new 14-day high but the RSI has not and this is “BEARISH DIVERGENCE” on the Daily Chart. The Daily MACD continues to trade above its signal line. On the Weekly Charts, though the RSI has just reached its highest value in 14-days, the Candles shows formation of a ”A Spinning Top” which shows potential formation of a top and the chances of weariness creeping in.

Both NIFTY and Stock futures have continued to add in net Open Interest.

Having said this, if we take global cues into account we have been best performer among peers in the global markets on Friday. However, we have all theoretical chances of seeing some weakness creeping in today.

All and all, if we see the overall technical indicators and structure of the Charts, we are not expected to see a run away rise in the Markets. Even if it occurs, it would be greatly unhealthy rise as given the structure of the Charts, some consolidation or correction would be imminent in order to make the Markets healthy. Any rise should be used in exiting long positions and profits should be guarded on either side. While maintaining very selective approach, cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331