Wednesday, August 27, 2014
MARKET REPORT August 28, 2014
The last hour of the trade turned very volatile as the Markets swung nearly 60-odd points both ways after a mostly range bound session and ended the day once again on a modestly positive note. The Markets opened on a decently positive note but did not show any trend post opening as it maintained its opening gains for the most part of the session while trade in a sideways trajectory though it formed its intraday high of 7946.85 in the early minutes of the trade. It traded sideways after this for the most part of the session. In the late afternoon trade, the Markets saw a sharp downward movement as it pared all of its gains and formed its intraday low of 7916.55. It saw recovery coming in immediately after that and the Markets recovered all of its losses. It finally managed to end the day at 7936.05, posting a net gain of 31.30 points or 0.40% while forming a higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, AUGUST 28, 2014
Tomorrow, we enter the expiry day of the current August Derivative series. The session is undoubtedly remain dominated with rollover centric activity and quite good amount of volatility is likely to remain ingrained in it. Further, the trend formation would continue to pose resistance but maintenance of levels above of 7910-20 range would leave some room for up side for the Markets though it would be equally dangerous as well.
For tomorrow, the levels of 7965 and 7980 would act as resistance. The supports would come in at 7910 and 7825 levels.
The RSI—Relative Strength Index on the Daily Chart is 64.9322 and it has reached its highest value in last 14-periods which is bullish. It does not show any bullish or bearish divergence as such. The Daily MACD continues to trade above its signal line.
On the derivative front heavy market wide and NIFTY rollovers continued. NIFTY August futures shed over 16.57 lakh shares or 15.77% in Open Interest whereas NIFTY September Series added over 42.71 lakh shares or 64.73% in Open Interest.
Going again to the pattern analysis, as mentioned often in our previous editions, the Markets continue to remain in broad range. There can be absolutely no doubt that such broad formation can be very early signs of the Markets topping out. It is evident by the volatility that is ingrained and also the small body of the trading sessions and narrowing market breadth also signals towards some exhaustion in the Markets. The Markets will continue to inch upwards so long as it stays above 7910-20 range but at the same time, very sharp reversal from any level cannot be ruled out.
Overall, with some immediate steam left, traders / investors can ride the Markets as it attempts to inch upwards so long as it stays above 7910-20 levels. But each such rise should be extremely cautiously dealt with as, just as mentioned earlier, sharp reversal from top cannot be ruled out. While maintaining extreme caution on the upside, controlled and moderate leverage is advised in the Markets.
Consulting Technical Analyst,
Tuesday, August 26, 2014
MARKET REPORT August 27, 2014
The Markets on Tuesday saw much amount of volatility on either sides but it managed to end the day on a flat note after some wild swings. The Markets opened on negative note as expected and after briefly trading in the red, it crawled briefly into the green to form the day’s high of 7915.45. As mentioned in our yesterday’s edition, the Markets resisted at this level to its rising trend line drawn within the broad formation. The Markets, after briefly trading in capped range slipped again into the red. The rest of the session saw the Markets under pressure as it kept forming new lows gradually. In the late afternoon trade the Markets went on to form the day’s low of 7865.45. The last hour and half of the trade saw some sharp rollover related short covering as the Markets managed to recoup nearly all of its losses. It finally managed to end the day nearly flat at 7904.75, posting a very minor loss of 1.55 points or 0.02% while forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, 27TH AUGUST, 2014
Tomorrow’s analysis continue to remain more or less on similar lines like today. The Market opening and its subsequent behaviour vis-à-vis the levels of 7910-20 zone would critically affect the trend. It would be necessary for the Markets to maintain levels above of this along with reasonable volumes in order to avoid any further pressure coming in. Over and above this, the rollovers too would dominate as we enter the penultimate day of expiry.
The levels of 7910-20 zone and 7965 would continue to act as resistance levels. The supports would come in at 7840 and 7805 levels.
The RSI—Relative Strength Index on the Daily Chart is 62.9500 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.
On the derivative front, NIFTY rollovers continued as August series shed over 23.21 lakh shares or 18.09% in Open Interest while NIFTY September series saw addition of over 23.93 lakh shares or 56.93% in total Open Interest. The NIFTY PCR saw a negligible change over the previous day.
Taking a look at pattern analysis, again the reading remains more or less same like that of yesterday. The Markets continues to remain on broadening formation and within that it is resisting to a rising trend line inside that. The net effect is that the Markets will continue to consolidate in near term and in case of up move will not see a breakaway rise while it continues to remain in the broad pattern.
Overall all, the Markets are continued to see a ranged movement with some amount of volatility remaining ingrained in it. Volatility would also be induced by rollovers as we are in the penultimate day of expiry of current series. Keeping this and other overall technical structure of the Markets in view, it is continued to be advised to avoid making over-purchases. Any up moves within the broad range should be utilized to protect profits at higher levels. Cautious outlook is continued to be advised.
Consulting Technical Analyst,
Monday, August 25, 2014
MARKET REPORT August 26, 2014
Technically weak Markets got the blame the Supreme Court today as after a buoyant session; it gave up all of the gains to end the day with nominal losses. The Markets opened on a positive note, contrary to what was expected. After opening positive, the Markets kept strengthening itself as it kept making gradual highs. Without exhibiting much of the volatility, the Markets went on to form the day’s high of 7968.25. After marking yet another lifetime high, the Markets saw a sudden pressure being exerted on the Markets. News flow of a Supreme Court Judgment was to blame but the Markets were anyways technically weak. It suddenly pared all of its gains in a sharp and rapid manner and dipped into the red to form the day’s low of 7897.95. It came off nearly 70-odd points from its day’s high and finally ended the day at 7906.30, posting a net loss of 6.90 points or 0.09% while forming a higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR 26TH AUGUST 2014
Tomorrow’s session is likely to be a acid test for the Markets. The opening levels would decide the trend for tomorrow as the Markets have failed to move past the rising trendline despite being in the broad formation. The maintenance of levels of 7925 and upwards would be necessary for the Markets to maintain its up move. However, being the expiry week the rollovers would also dominate the Markets.
The levels of 7920 and 7965 would act as immediate resistance. The supports are seen at 7840 and 7805 levels.
The RSI—Relative Strength Index on the Daily Chart is 63.1140 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD too trades above its signal line.
On the derivative front, NIFTY along with other key stocks continued to see rollovers. NIFTY August Series shed over 15.33 lakh shares or 10.67% in Open Interest whereas September series added over 11.77 lakh shares or 38.90% in Open Interest. The NIFTY PCR however remained unchanged.
Going back to pattern analysis, as mentioned in the yesterday’s edition of Daily Market Trend Guide, the Markets continues to remain in a topping out process and formation. Within that even if it sees such rapid advances, it would continue to see such corrective pressures as well. The Markets continues to trade within a specified range.
Overall, with the Markets under Broadening Formation, it would continue to see ranged and volatile movements. Even if we see short coverings or rollover centric advances or spurts the overall bias would still continue to remain on downside. While keeping purchases very limited any such rallies should be used to protect the existing profits. Cautious outlook is advised as any up move is likely to meet such corrective pressures.
Consulting Technical Analyst,
Sunday, August 24, 2014
MARKET REPORT August 25, 2014
The Markets traded on analysed lines of Friday as though it remained positive, spent the entire session in a capped range and ended the day with modest gains. The Markets opened on a modestly positive note and traded with very limited gains in the early morning trade. It saw some strength in the late morning trade as it managed to crawl up to mark the day’s high of 7929.05. In the afternoon trade, the Markets saw some paring of gains as it came of from its day’s highs. Most of the gains were pared as the Markets traded nearly flat. The second half of the session saw the Markets slightly recovering but it continued to overall trade in just 25-odd points range for the entire session. It finally managed to end the day at 7913.20, posting a net gain of 22.10 points or 0.28% while forming a moderately higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR 25TH AUGUST 2014
The Markets are likely to again see a ranged session tomorrow. The opening might be quiet but the Markets are overall in a topping out process. Even if the Markets continue to inch upwards the overall session is likely to be a ranged session capped on upside. The volumes have continued to remain below average and therefore a concern. The intraday trajectory and the volumes would continue to critically contribute to shape the direction of the Markets in coming days.
The range of 7910-7935 and 7965 would act as immediate resistance on the Daily Charts. The supports would come in at 7855 and 7810 levels.
The RSI on the Daily Chart is 63.8013 and it has reached its highest value in last 14-periods which is bullish. However, it does not show any bullish or bearish divergences. The Daily MACD remains bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 69.5861 and has generated a sell signal. Though it does not show any failure swing, the NIFTY has set a fresh 14-period high while Weekly RSI has not. This shows a clear Negative Divergence on the Weekly Charts. The Weekly MACD, however, trades above its signal line.
On the Derivative front, since the expiry week begins tomorrow, no stand along numbers would directly throw any light. However, on Friday, the NIFTY August futures have continued to shed over 3.17 lakh shares or 2.16% in Open Interest. This showed unwinding of long positions in the and some short covering as well in the August series.
Once again, going by the pattern analysis, the Markets have continued to remain in a Broadening Formation which is usually seen during a topping out process. This means that the Markets are in the process of marking a top and this can happen any time. The characteristic of this is the declining volume that we have been witnessing in many of the NIFTY components. This means, even if the Markets continue to inch upwards, it would continue to do so declining or lower volumes and will not give any runaway rise. Any such runaway sharp rise should be suspected as buying climax.
All and all, we continue on the lines of the advisory that we issued during the entire last week. To reiterate, it is advised to continue to remain very moderate on positions and the profits should be monitored and protected very vigilantly on the higher side. Purchases should be restricted and made very selectively. Even if the short term upward move continues, the overall bias remains towards some more consolidation or impending correction. Being watchful in the Markets is advised.
Consulting Technical Analyst,