Friday, August 16, 2013
MARKET REPORT August 16, 2013
The Markets continued its up move and ended positive for the fourth day in a row as it perked up in the second half after a capped morning session. The Markets opened on a flat to mildly positive note and after trading positive, dipped in the negative territory in the early minutes of the trade to give the day’s low of 5690.20. The Markets attempted to recover in the morning session and traded modestly positive but soon pared its gains to trade flat. The Markets pared gains after a brief recovery again by afternoon trade. However, in the second half, the Markets attempted an up move again and this time, sustained it as well. It went on to give the day’s high of 5754.55 towards the end of the session and finally ended the day at 5742.30, posting a net gain of 43 points or 0.75% while continuing to form a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
We have had a trading holiday yesterday on account of Independence Day and therefore, today’s market opening would be more or less in adjustments to what happened yesterday in the Global Markets. However, the opening would be flat to modestly negative but all technical factors and the F&O data indications remain intact to suggest that the session would be more or less range bound with a up ward bias.
For today, the levels of 5760 and 5810 would be immediate resistance on the charts. The supports come in at 5690 and 5655 levels.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 48.0243 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD continues to trade below its signal line.
On the derivative front, the NIFTY August futures have added over 11.19 lakh shares or 8.12% in Open Interest. This is a very important indicator as for the last three days of rise, the NIFTY had risen while shedding Open Interest. While on Wednesday, the Markets have risen while adding Open Interest. This clearly suggest and signify that on Wednesday, the Markets have risen due to fresh longs being added and not because of mere short covering.
To conclude, today’s session would remain more or less in adjustment to what happened in the Global Markets while we were shut yesterday. However, this is likely to keep the Markets little volatile and range bound but no possibility of major downside is seen given the reading of the lead indicators as well as the F&O data. We may see minor profit taking or some amount of volatility but no serious threat to the up move that is being witnessed.
All and all, the reading remains more or less like that of Wednesday. Markets may see minor profit taking or some amount of volatility but the overall trend remains intact given reading of the lead indicators and the derivatives data. It is advised to continue to refrain from creating shorts. Existing positions may be maintained and profits be protected at higher levels. Selective out performance would continue. Overall, heavily stock specific approach with caution is advised for today.
Consulting Technical Analyst,
Wednesday, August 14, 2013
MARKET REPORT August 14, 2013
Yesterday’s session remained that of a pleasant recovery session for the Markets as the Markets opened on a negative note but then went on to add gains one way and ended the day on a fairly stronger note. The Markets opened on a negative note and formed its intraday low of 5578.90 in the very early minutes of the trade. The Markets formed a upward rising channel thereafter and remained in rising trajectory for the rest of the session as it kept gradually making new highs. This continued for the entire session as the Markets rose over 125-odd points from its opening lows. The Markets went on to give its intraday high of 5704.75 and maintained those levels till the end. It finally ended the day at 5699.30, posting a robust gain of 86.90 points or 1.55% while continuing to make a higher top and higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today, after posting there days of up move, the Markets are expected to take little breather and open on a mildly negative to flat note and look for directions. There is nothing on Charts to indicate a downward move and the Markets have some room more to move up and continue with its recovery. However we have a truncated week with tomorrow being a holiday and we might see some minor profit taking happening.
For today, the levels of 5730 and 5765 are immediate resistance on the Charts. The supports come in much lower at 5650 an 5635 levels.
The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 44.7630 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD trades below its signal line and is bearish but is attempting to move towards a positive crossover in coming days if the Markets maintain these levels.
On the derivative front, the NIFTY August futures show shedding of over 8.48 lakh shares or 5.80% of Open Interest. This remains a negative reading as it signifies that the rise has been due to massive short covering from lower levels and not a fresh buying. However, on the other end, the stock futures show total addition of over 1 Crores shares in Open Interest.
Given the above reading, it clearly shows that the reading of the technical indicators and the F&O data is not in sync and it deviates from each other while keeping the bias on the continuation of up move. With the lead indicators in place, the chances of the Markets resuming its downward journey is less likely. On the other hand, it would be important to see that the up moves that are occurring due to short covering should get replaced with fresh buying.
All and all, given the deviation in the reading of technical indicators and the F&O data, there are chances that the Markets remains and trades in a capped range and consolidates a bit before it continues with its up move. There are no indications of the Markets resuming its downward move and therefore, shorts should strictly be avoided. Given the truncated week, capped movement or minor profit taking can be expected, however, the overall bias remains bullish and on upside. Positive caution is advised for today.
Consulting Technical Analyst,
Tuesday, August 13, 2013
MARKET REPORT August 13, 2013
The Markets had a relatively better session yesterday as it ended the day with decent gains even after coming off its highs in the last hour of the trade. The markets opened on a modestly positive note but in the morning trade pared its opening gains to trade briefly into negative while giving its intraday low of 5557.10. However, post this level, the Markets transformed itself into rising trajectory and kept making new highs gradually. It went on to give the day’s high of 5644.10 in the late afternoon trade. However, the Markets saw some paring of gains from those levels. It retraced a bit and finally ended the day at 5612.40, posting a gain of 46.75 points or 0.84% while forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a positive note and continue with its up move at least in the initial trade. The Markets are expected to maintain positive figures in the initial trade and look for directions later. There has been little lack of conviction in the markets while moving on both side and therefore the intraday trajectory that the Markets form post opening would be critical for the day’s trend.
For today, the levels of 5650 and 5695 would act as immediate resistance on the charts. The supports come in at 5585 and 5550 levels.
The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 37.3910 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to trade below its signal line.
On the derivative front, the NIFTY August futures have shed over 12.01 lakh shares or 7.59% in Open Interest. This is a negative reading as it suggests that the rally that we saw in the morning trade has been more on account of short covering rather than fresh buying. This getting replaced with fresh buys would be critically important for the Markets.
Given the above reading, it is clear that the Markets have taken support, as of now, on the trend line and the pattern support. However, it has clearly lacked the conviction while moving up as well. There is clear lack of consensus in the Markets that we are seeing right now and this can keep the Markets fairly in a range in coming days. We need up moves with conviction which also adds open interests across the board while moving up and this is not happening.
All and all, flat to mildly positive opening likely but it would be important for the Markets to sustain whatever opening gains that it has and builds up further from there. No aggressive buying should be done until the Markets moves past the levels of 5650 comprehensively. Shorts too should be avoided. Selective out performance would continue. Overall, it is advised to remain extremely selective while building fresh positions and instead adequate liquidity should be maintained. Cautious outlook is advised for today.
Consulting Technical Analyst,
Monday, August 12, 2013
Daily Market Trend Guide – Special Edition
Next few Trading Days to decide immediate Trend of Markets. Monday, 12 August 2013
After creating a top of 6338 on Nov. 5th 2010, the Market started its Downward Sloping Channel with intermittent up moves giving downward sloping tops. This Downward Sloping Channel ended on Dec 20 2011 with low of 4531 Nifty
Thereafter, the Market witnessed a Major Trend Reversal and went on to registered a sharp up move, and got into the pattern of Upward Rising Channel from Dec. 20 2011. The Market remained in this almost thirteen months long term upward trend till May 20 2013, the day on which the Market gave , what in Technical Analysis is called, Inadequate Rise.
The Market remained in Long Term Upward Channel and thereafter gave, what in Technical Analysis is called, Inadequate Rise. The present and the past few month’s Market condition has emerged from this Technical event of Inadequate Rise
Is the end of this downtrend in sight ? What would be immediate trend of the Market ? What should be your Nifty Trading Strategy in coming days ?
Long Term Technical Analysis of Nifty, and detailed Technical Analysis of past three months give accurate answers to these questions.
While the Long Term Technical Analysis of Nifty has already been discussed above, the detailed Technical Analysis of Nifty of past three months clearly indicates that after giving Inadequate Rise on May 20 2013 and breaching Long Term Upward Rising Trend Line, the market has reached it two major supports on the charts.
The first major support level is in the range of 5532 – 5448. This is the Gap created between Nifty values on 13 Sept and 14 Sept 2012. Such upward Gaps are strong supports during downward journey of markets.
The another major technical support is in the Support Line of a technical formation called Rectangle Formation. The Market has entered into this Formation since 28 May 2013 and had now reached its lower support line .
Translating this technical analysis into Accurate Nifty levels, it is very clear from the charts that Nifty will have some support in the range of 5532- 5448 and 5490. Closely watch these levels for strong support in coming trading days.
Candle chart of Nifty also indicates that An engulfing bullish line occurred (where a white candle's real body completely contains the previous black candle's real body). The engulfing bullish pattern is bullish during a downtrend which is the case with NIFTY. It then signifies that the momentum may be shifting from the bears to the bulls.
Very Important Indicator RSI has just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a Buy generated on Aug 08, 2013.
Another important technical formation on the Charts of Nifty is that after being into upward trend since long, the Nifty has got into Rectangle formation and not into downward sloping channel. This is another positive long term development for Nifty and the Markets.
Market is very near to its very important support levels of the range of 5532- 5448 and 5490 The next few trading sessions are very crucial for the market and will be a decider for the immediate trend of the market.
Nifty Trading Strategy : Take Long Position in Nifty above Nifty Levels of 5532- 5448 and 5490. Put a very strict Stop Loss at these levels and reverse the trade if Nifty breaches these levels.
MilanVaishnav, Consulting Technical Analyst, www.MyMoneyPlant.co.in http://milan-vaishnav.blogspot.com +91-98250-16331