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Wednesday, April 30, 2014

Daily Market Trend Guide -- Wednesday, April 30, 2014

MARKET REPORT April 30, 2014

The Markets continued with its correction for the third day in a row, much on the expected lines as once again Markets ended the day with losses. The Markets opened on a positive note but remained positive only until few seconds while it formed its intraday high of 6779.70 in the very early seconds of the trade. The Markets then soon dipped into negative territory to trade modestly negative. The Markets showed trade in a capped range again as it moved sideways in a very narrow trajectory. It did make a feeble attempt to recover in the afternoon trade but gave up in the late afternoon trade once again as it saw some selling pressure coming in. It weakened further as it went on to post the day’s low of 6708.65. It finally ended the day at 6715.25, posting a net loss of 46 points or 0.68% while continuing to form a lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, the Markets are likely to see a modestly positive opening and is likely to trade positive in the early trade but there are all chances that the Markets continues with its correction. Though intraday trajectory would continue to remain critical, it is likely that the Markets may trade in negative trajectory post opening.

For today, the levels of 6760 and 6795 would act as immediate resistance for the Markets. The supports exist at 6685 and 6640 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.8205 and it has reached its lowest value in last 14-days, which is Bearish. Further, the RSI has made a new 14-period low but NIFTY has not yet and this is Bearish Divergence. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, NIFTY May futures have shed over 8.65 lakh shares or 6.29% in Open Interest. This is a clear indication that offloading of long positions have continued in NIFTY Futures . Stock futures too have shown net decline in Open Interest.

Going by the pattern analysis, the Markets have retraced after forming a immediate top of 6869 as it failed to break out on the upside from 6820 levels. This will now keep the Markets in corrective mode until these levels are breached with conviction. However, going by the pattern analysis, lead indicators and further going by F&O data, the Markets are very clearly likely to continue with its correction.

All and all, some amount of volatility will remained ingrained in the Markets. The markets may also see some intermittent bounces but it is very likely that it continues to remain in the corrective mode. Keeping in line with this analysis, we continue to reiterate caution and therefore the exposures should be kept moderate in the Markets while remaining very selective and stock specific. Overall, continuance of cautious approach is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, April 29, 2014

Daily Market Trend Guide -- Tuesday, April 29, 2014

MARKET REPORT April 29, 2014

The Markets retraced yesterday but the yesterday’s session remained terribly range bound as the Markets spent the entire session in a 20-odd points range while ending the day on a modestly negative note. The Markets opened on a mildly negative note and after trading in a range, dipped further to report the day’s low of 6750.30. The Markets soon recovered from that level but continued to trade in the negative territory. However, thereafter, the Markets just did not show any directional bias and traded in a very narrow and capped range in the sideward trajectory. The Markets traded in this manner until the end and finally ended the day at 6761.25, posting a net loss of 21.50 points or 0.32% while forming a sharply lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, we would witness a session quite similar to that of yesterday. The Markets are likely to open on a quiet to modestly negative note and look for directions. The trajectory that the Markets form would be critical but the overall bias remains towards some consolidation / correction continuing in the Markets with the level of 6869 acting as its immediate top.

For today, the levels of 6785 and 6820 would act as immediate resistance for the Markets. The supports exit much lower at 6710 and 6665 levels.

The lead indicators continue to remain weary on the Daily Charts. The RSI—Relative Strength Index on the Daily Chart is 59.1765 and it continues to remain neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD continues to remain bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY May futures have added over 3.64 lakh shares or 2.71% in Open Interest. The NIFTY PCR stands at 1.12 as against 1.14. The increase in OI indicates that some amount of shorts have started to exist in the system as it has come with the decline in futures.

The patterns on the Daily Chart remain same. The Markets are showing signs of tiredness and the level of 6869 has become an immediate top for the Markets. The Markets with either consolidate or correct but any sustainable up move shall occur only when the Markets moves past this level. Until this happen, it would continue to show erratic behaviour on the Daily Charts.

All and all, we continue with our advice to remain moderate on positions. The reason behind this is that the patterns on the Markets are little overstretched and because of this, any possibility of a correction from these levels cannot be ruled out. This situation is very typical when the overall up moves are dictated with FII money which often tend to neglect technicals for some time. Therefore, while remaining moderate on the positions, cautious outlook should be maintained for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, April 28, 2014

Daily Market Trend Guide -- Monday, April 28, 2014

MARKET REPORT April 28, 2014

The Friday’s session saw the Markets correcting, much on the expected lines as it opened flat, and then gave up in the second half of the session to end the day with losses. The Markets opened a flat note and formed its intraday high of 6869.85 in the very early seconds of the trade. Thereafter the Markets soon dipped into the negative to trade with modest losses. The markets moved in the sideways trajectory and moved in the 20-odd points range with capped losses for almost half of the trading session. The second half of the trading session saw decline in the Markets as it saw a bout of selling pressure. The Markets weakened further and lost further ground as it went on to form the day’s low of 6772.85 losing nearly 97-odd points from its day’s high. No recovery was seen from these levels and the Markets finally ended the day at 6782.75, posting a net loss of 58.05 points or 0.85% while forming a slightly higher top and sharply lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

The season of “truncated weeks” continue as this week too is a truncated week with Thursday being a trading holiday again. Today, the Markets are expected to open on a negative note again and there are strong chances that the weakness continues and the Markets continue to remain in the corrective mode. Though the intraday trajectory that the Markets form would be critical but it is not likely to change the overall bias in the Markets today.

For today the levels of 6810 and 6860 would act as immediate resistance levels for the Markets. The supports exist much lower at 6720 and 6675 levels.

The lead indicators continue to show signs of weariness in the Markets. The RSI—Relative Strength Index on the Daily Charts is 61.8476 and it is neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD is bearish as it trades below its signal line. On the Candles, a sign of potential weakness is seen. An Engulfing Bearish Line has occurred. This engulfing bearish pattern is absolutely bearish which appears during an uptrend. This is a clear case with NIFTY. This signifies that the momentum in the Markets is weakening. The RSI on the Weekly Charts too stands overbought.

On the derivative front, NIFTY May futures have shed over 6.81 lakh shares or 4.84% in Open Interest. This very clearly signifies that there has been offloading / unwinding of long positions in the Markets.

Going by the pattern analysis, the Markets have again formed a potential top at 6869 levels and there will be no significant up move until the Markets moves past this level. There would be two distinct scenarios that either the Markets would continue to correct from these levels OR would again consolidate in a given trading range as it has been doing. But there will be no run away rise in the immediate short term and in even of such rise occurring there would be a big question mark on its sustainability.

All and all, the Markets are most likely to remain in the corrective mode. The upsides may occur on account of short covering but there will be no sustainable up move until the Markets moves past the levels of 6869. We continue to advice to remain moderate on exposure and any such dips, like that occurred on Friday, should be utilized to make very selective fresh purchases. Overall, continuance of cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331