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Thursday, January 30, 2014

Daily Market Trend Guide -- Thursday, January 30, 2014

MARKET REPORT January 30, 2014

Rollovers and tapering fears played spoilsport with the Markets yesterday as they reduced the strong opening to just a flat closing in what was seen as a buoyant session initially. The Markets opened on a decently positive note, somewhat better than what was expected and formed its intraday high of 6170.45 in the early minutes of the trade. The Markets spent the most part of the session thereafter in a narrow and slightly sloping channel with a little downward bias. Lead by rollovers and fear of US tapering the Markets lost ground sharply in the last hour of the trade. It pared all of its gains, dipped in the negative to give day’s low of 6109.80. It recovered a bit from those levels and finally ended the day at 6120.25, posting a negligible loss of 6 points or 0.10% while forming a slightly higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today’s session is likely to be like a acid-test for the Markets. The Markets have taken support at its 100-DMA at Close levels. However, US tapering of $10 billion will take its toll on opening and the Markets are set to open lower. The key point is to see if the y recover later in the day today or tomorrow as any expected gap down opening with make the markets “oversold”.

For today, the levels of 6170 would act as resistance while supports exist at 6120 levels at Close levels and at 6030 levels intraday.

The RSI—Relative Strength Index on the Daily Chart is 38.8366 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergences as such. The Daily MACD remains bearish as it continues to trade below its signal line.

On the derivative front, it has been seeing a lots of shorts being rolled over. The market wide rollovers have stood at 59% as against 53% and the NIFTY rollovers have been seen at a high of 65% as against 54%. The NIFTY January futures have been trading in a discount and the discount widened yesterday showing that a huge amount of shorts are existing in the system.

Having said this, today’s session is set to be a difficult one for the Markets. On one hand, it is all set and likely to breach the key support of 100-DMA and at the same time, if sees a deeper cut, it would immediately get “oversold”. It would be critically important to see if the Markets recover in the second half of in new series beginning tomorrow.

From what is seen from the pattern analysis and the key F&O data, the Markets will not see a serious breach beyond today’s gap down opening. It is strongly advised to cover profits in any existing short positions. However, it is also advised to avoid any aggressive buying as well. Fresh shorts should not be make as it can lead to short trap in coming days. While remaining light on positions, maintaining liquidity for existing positions with cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, January 29, 2014

Daily Market Trend Guide -- Wednesday, January 29, 2014

MARKET REPORT January 29, 2014

The levels of 100-DMA stood out as support as the Markets spent an extremely volatile session amid RBI rising Repo Rate by 25 bps while it ended the day with negligible loss. The Markets opened on a quiet note as expected and spent the morning session in a capped range while it gave its intraday high of 6163.60. Thereafter, the Markets saw a very sharp paring of gains after RBI raised the repo rates as it came off over 80-odd points in a very sharp vertical fall while reporting its day’s low of 6085.95. While reporting both the intraday high and the low in the morning trade, the Markets spent the rest of the session recovering from its lows and spending the rest of the session in a capped range. The Markets recovered almost all of its losses and finally ended the day at 6126.25, while posting a negligible loss of 9.60 points or 0.16% while forming a lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

The levels of 100-DMA has stood out as support at Close levels and today, we are expected to see some respite from the weakness that we have been seeing. The markets are expected to open on a modestly positive note and look for directions. As evident from the Charts, the Markets have broken support of a trend line and its 50-DMA and therefore it would be critically important for the Markets to move past that levels to resume its up move.

For today, the levels of 6165 and 6210 would act as immediate resistance for the Markets while the levels of 6110 is likely to act as support at Close levels.

The RSI—Relative Strength Index on the Daily Chart is 39.2754 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 trades below its signal line.

On the derivative front, rollover continued as the NIFTY January futures have shed over 18.50 lakh shares or 14.65% in Open Interest whereas the February futures have added over 37.05 lakh shares or 42.84% in the Open Interest.

The pattern analysis shows the Markets breaching the levels of 50-DMA and a rising trend line which coincides as a same levels around 6200-6215. It would be therefore very important for the Markets to move back above these levels for resuming a sustainable up move. So long as it rules below these levels it will have a looming danger of consolidation and some further correction. However, positively speaking, the levels of 100-DMA have stood out as support at Close levels.

All and all, the Markets will find resistance near the 6200-6215 levels while the levels of 100-DMA acting as supports. It is advised to continue to remain light on the positions while maintaining liquidity and making very selective, few purchases and protecting existing profits at higher levels. The directional consensus still lacks however, the room for improvement remains strong and intact. Overall, cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, January 28, 2014

Daily Market Trend Guide -- Tuesday, January 28, 2014

We have not been able to come out with edition of Daily Market Trend Guide in regular PDF Format. However, the section "Market Trend For Today" has been reproduced in text format below. Inconvenience is sincerely regretted.

MARKET TREND FOR TODAY
It is today, that the RBI is slated to come up with Credit Policy and the Markets are again set to react to it today. After losing over 200-odd points in last two trading sessions, the Markets are again slated to open on a quiet note and look for directions. The Markets are likely to see a quiet opening and a range bound trade in the morning and would react to the RBI Announcements later on. RBI is expected to leave the key rates unchanged.

The Markets have breached the 50-DMA and therefore, the levels of 6106, which is the 100-DMA is likely to get tested and act as support. The resistance on the upside would be 6218 and 6280 levels. It would be very important for the Markets to move past the 50-DMA to avoid any structural weakness.

The RSI--Relative Strength Index on the Daily Chart is 39.9499 and it has reached its lowest value in last 14-days which is bearish. It, however, does not show any bullish or bearish divergences. The Daily MACD too, due to the sharp fall in two days, has reported a negative crossover and now trades below its signal line.

On the derivative front, rollovers have begun. NIFTY January futures have shed over 32.18 lakh shares or 20.28% in Open Interest whereas the February series have added over 37.69 lakh shares or 77.38% in Open Interest.

Going purely by the Charts, the Markets have breached the levels of 6218, which is the 50-DMA and this would act as resistance on the way up. It would be, therefore, very much imperative for the Markets to rise and move past that levels again in order to avoid any structural breach. On the way down, today's opening is likely to test the 100-DMA, which is 6106 and the Markets are very much likely to take support around those levels.

All and all, it is very much likely that we see a quiet opening in the beginning and a range bound trade but there are equally good chances that the Markets improves as we go ahead in the session. With RBI likely to keep the key rates unchanged any smallest trigger would see the Markets improving after taking initial support. Overall, while avoiding any major fresh positions, maintenance of liquidity and cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, January 27, 2014

Daily Market Trend Guide -- Monday, January 27, 2014

MARKET REPORT January 27, 2014

The Friday’s session weighed down heavily with multiple events coming up this week as the Markets opened lower, drifted further down and ended the day with losses. The Markets opened on a mildly negative note and formed its intraday high of 6331.45 in the early morning trade. Thereafter, the Markets never saw any strength coming in as it continued to drift lower. It traded sideways until the second half of the session and in the late afternoon trade, drifted even further lower to form the day’s low of 6263.90. After hovering around those levels for a while, it never really saw any recovery and ended the day at 6266.75, posting a net loss of 78.90 points or 1.24% while forming a sharply lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Beginning today, we have expiry coming this Thursday. More importantly, RBI shall come up later today with the Credit Policy and apart form this domestic event, there is two-day FOMC meet beginning tomorrow and fear of tapering would weigh on the Markets. Given all this, we are likely to see a gap down opening today, however, the 50-DMA levels of the Markets would come again into play and it would be critically important to observe the behaviour of the Markets around these levels.

For today, the levels of 6310 and 6350 would continue to act as resistance and the levels of 6210 and 6175 would act as immediate support.

The RSI—Relative Strength Index on the Daily Chart is 50.9618 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bullish as it trades above its signal line. On the Weekly Charts, RSI is 57.6893 and it continues to remain neutral. The Weekly MACD too remains bullish as it trades above its signal line.

On the derivative front, NIFTY January futures have shed over 13.01 lakh shares or 7.58% in open interest whereas the February futures have added over 5.32 lakh shares or 12.22% in Open Interest.

Going by the over all pattern analysis, today, the Markets are likely to test the 50-DMA once again, and given this scenario, if the Markets closed below the 50-DMA OR its filters it may bring in temporary weakness. However, if we read this along with the lead indicators, there are chances that the Markets finds its support near the 50-DMA or little below that within its filters and recovers from that. Given these fair chances, we may see selective stock picking happening from lower lowers and the Markets do not report a structural breach on the Daily Charts.

Overall above that is mentioned above, the Markets would also see itself reacting to the RBI Credit Policy and it is expected to do so after trading in a range in the morning trade. Given all this, it is highly recommended the once should still continue to refrain from shorts until the Markets breaches the critical support at close levels. Until this happens, we would continue to see selective stock buying from lower levels. Overall, while remaining light on positions and maintaining adequate liquidity, very selective stock picking may be done at lower levels.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331