Daily Market Trend Guide -- Friday, November 21, 2014

MARKET REPORT                                                                             November 20, 2014

The Markets continued to show quite good amount or resilience as it recovered from the lows of the day to once again end the day with minor gains.  The Markets saw a modestly positive opening but soon after a positive start it drifted into the red after a range bound trade in the morning session. By afternoon trade, the Markets slowly drifted to the low point of the day at 8353.15. The Markets once again saw a range bound trade in the second half of the session. However, in the last hour and half of trade the Markets saw itself recovering from lower levels. It slowly recovered all of its gains and traded flat. It further went into positive territory and also went on to form the day’s high of 8410.85. After hovering around those levels, it finally ended the day at 8401.90, posting a minor gain of 19.60 points or 0.23% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, NOVEMBER 21, 2014 

Due to the Markets severely consolidating in a sideways trajectory, the analysis continues to remain on the similar lines. The Markets can once again see a quiet opening and we can continue to see the Markets trading in a ranged manner with some amount of volatility ingrained in it. The intraday trajectory continues to remain critical with the levels of 8455 acting as immediate resistance.

The levels of 8420 and 8455 would act as resistance whereas the supports would come in much lower at 8270 and 8215 levels.

The RSI—Relative Strength Index on the Daily Chart is 68.6569 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD continues to remain bullish while trading above its signal line. On Candles, A hanging man occurred (a hanging man has a very long lower shadow and a small real body).  This pattern can be bullish or bearish, depending on the trend.  If it occurs during an uptrend (which appears to be the case with NIFTY) it is called a hanging man line and signifies a reversal top

On the derivative front, NIFTY November futures  have further shed over 5.73 lakh shares or 2.61% in Open Interest. This signifies short covering from higher levels being observed in the Markets.

Going by the pattern analysis, the Markets have continued to move in sideways trajectory after attempting a breakout. On the Weekly Charts, it has continued to resist to the rising upper trend line of a broadening formation. On the Daily Charts, therefore, the Markets are showing some signs of immediate short term weakness.

Given this reading, the Markets are likely to continue to consolidate sideways trajectory in a ranged manner with a mild downside bias. Under such circumstances, the approach of very vigilantly protecting profits at higher levels should be continued. Fresh purchases in defensives can be made as some sectoral out performance would be seen but this should be done extremely selectively. Overall, continuation of cautious approach is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Thursday, November 20, 2014

MARKET REPORT                                                                               November 19, 2014

The Markets failed to confirm its attempted breakout as it ended the day with modest losses after trading in sideways trajectory until the afternoon trade. The Markets saw a positive opening and after opening positive, it soon formed its intraday high of 8455.65 in the early minutes of the trade. The Markets thereafter soon drifted on the downside while paring its morning gains to trade flat. It spent the first half of the session trading near its previous Close until afternoon. The second half of the session saw the Markets witnessing some selling pressure and it drifted further into the red. It went on to form the day’s low of 8360.50 in the last minutes of the session. It saw a very minor recovery and it finally ended the day at 8382.30, posting a modest loss of 43.60 points or 0.52% while forming a similar top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, NOVEMBER 20, 2014

As it was widely expected due to the overbought nature of the Markets, it did not give any runaway rise and instead saw some selling pressure from higher levels. Again, expect the Markets to open on a quiet note and look for directions. Chances of further consolidation still remains significant given the technical structure of the Daily Charts. Volatility too would remain ingrained in coming sessions.

The levels of 8405 and 8450 would act as immediate resistance and the supports would come in much lower at 8270 and 8215 levels.

The Relative Strength Index on the Daily Chart is 67.4358 and it has just crossed below its topping formation which is bearish. It is otherwise neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish as it trades above it signal line.

On the derivative front, the NIFTY November futures have shed over 6.24 lakh shares or 2.76% in Open Interest. This clearly signifies that there has been some unwinding of long positions from higher levels.

Taking a look at pattern analysis, the Markets shows some room for some more consolidation at given levels. The Markets may continue to see selling pressure from higher levels in case of any up move. Though we may not witness any sharp or deep correction, there certainly appears that the Markets may continue to see such ranged session with mild correction.

All and all, looking at the technical charts and also taking a cue from pattern analysis, we may continue to see some selling pressure from higher levels. However, this would be range bound consolidation as the undercurrent continues to remain buoyant as the Markets have been showing good amount of resilience. However, the policy of continuing to protect profits at higher levels and selective buying while maintaining liquidity is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Wednesday, November 19, 2014

MARKET REPORT                                                                          November 18, 2014

The Markets it fresh lifetime highs again but at the same time continued to consolidate as well fiercely as it ended the day with minor losses. The Markets opened modestly positive as expected and surged ahead forming fresh lifetime and intraday high of 8454.50 in the late morning trade. However, the Markets halted its up move at this point and started to pare its gains slowly again. By afternoon trade, it had pared all of its morning gains and traded flat. By late afternoon trade, it saw some more weakness creeping in as it dipped into the negative and formed a intraday low of 8407.25. These losses too were recovered as the Markets slowly recovered from the low point of the day. It finally ended the day at 8425.90, posting a nominal loss of 4.85 points or 0.06% higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, NOVEMBER 19, 2014

Though the Markets are displaying phenomenal strength, it is fiercely consolidating in sideways trajectory. Given this, we can once again expect a quiet opening in the Markets and expect the Markets to consolidate in a ranged manner. In event of any up move, pressure from higher levels cannot be ruled out and therefore, the analysis continues to remain more or less on similar lines.

The levels of 8460 and 8490 would act as immediate resistance. The supports come in much lower at 8270 and 8215 levels.

The RSI—Relative Strength Index on the Daily Chart is 73.3372 and it is neutral as it shows no bullish or bearish divergences or any failure swings. It also continues to trade in “overbought” territory. The Daily MACD continues to remain bullish while trading above signal line.

On the derivative front, NIFTY November futures have over 1.94 lakh shares or 0.85% in Open Interest. This suggests some minor reduction of long positions and some amount of profit taking.

Going by the pattern analysis, as we have been mentioning in our previous editions of Daily Market Trend Guide, the Markets have been fiercely resisting to the upper rising trend line of the broadening formation, which is seen more clearly on Weekly Charts. Usually in such circumstances, the Markets can witness some sharp profit taking bouts from higher levels even if the under current certainly remains buoyant.

All and all, under such technical structure, it is advised to approach Markets on a very cautious note. It is very strongly recommended to keep overall exposure limited and cash should be preserved. Though purchases may be made, but it should be done on highly selective basis. Overall more emphasis should be laid on protecting profits at higher levels as profit taking bouts from higher levels cannot be ruled out. Overall, continuance of cautious approach is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Tuesday, November 18, 2014

Due to a technical glitch we have not been able to publish regular edition of Daily Market Trend Guide in PDF Format. However, we reproduce Brief Market Forecast for the Day below. Inconvenience caused is sincerely regretted.
BRIEF MARKET FORECAST FOR THE DAY, TUESDAY, NOVEMBER 18, 2014

The Markets have attempted a breakout yesterday but today, we can expect a flat to mildly positive opening. Though the breakout has been attempted, it is yet to get confirmed today. The Markets have very strong undercurrent but given the overbought nature of the Markets some degree of volatility and chances of some profit taking bouts from higher levels cannot be ruled out.

Overall, the the undercurrent, as mentioned above, certainly remain buoyant. However, some volatility would remain ingrained in the Markets. With each up move, higher degree of caution needs to be exercised while protecting profits very vigilantly at higher levels.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, November 17, 2014

MARKET REPORT                                                                           November 14, 2014

The Markets continued to consolidate for the 7^th day in a row while it saw a spurt in the final hour of the trade on Friday while it finished the session with gains. The Markets opened on a modestly positive note but after opening positive saw itself dipping into the red while forming the day’s low of 8346.80. It moved back in the positive territory soon after that in the morning trade but remained in a capped 20-odd points range throughout the rest of the trading session. It once again pared its gains from higher levels in the late afternoon trade but saw a very sharp spurt in the last hour of the trade. It not only recouped its earlier gains but formed a fresh intraday high of 8400.65. It finally settled the day at 8389.90, posting a net gain of 32.05 points or 0.38% while forming a slightly lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 17, 2014

Markets have been severely consolidating as very clearly evident from the Daily Chart and have been trading sideward displaying great amount of underlying strength. The Markets may again see a quiet opening again and it is likely to consolidate at higher levels and therefore the overall analysis would continue to remain on similar lines as the Markets continue to remain mildly overbought as well.

The levels of 8410 and 8445 would act as immediate resistance levels and the levels of 8270 and 8215 would continue appear as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 72.0093 and it does not show any failure swing. However, the NIFTY has formed a fresh 14-period high while RSI has not and this is Bearish Divergence. It also trades in “overbought” territory. The Daily MACD although continues to remain bullish trading above its signal line. On the Weekly Charts, the Weekly RSI is 71.5658. It also shows a Bearish Divergence as NIFTY has formed a fresh 14-Week high but Weekly RSI has not while trading in “overbought” territory as well. Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed 2.52 lakh shares or 1.09% in Open Interest.

Going by the pattern analysis, though the Daily Charts shows a prolonged formation, the Weekly Charts show a very classical Broadening Formation. With the ever rising upper trend line on both Daily and Weekly Charts, the Markets are not giving a clear breakout on the upside. As we have mentioned in our previous editions of Daily Market Trend Guide, such broadening formations are least useful patterns in achieving breakout as the breakout levels keep rising every day with the rising upper trend line which clearly diverges with the lower demand line. Also, the fact that the Markets continue to remain “overbought” also poses technical chances of the Markets consolidating at higher levels.

All and all, due to the present technical structure of the Charts, though the undercurrent remains extremely bullish, the Markets may continue to consolidate at higher levels. Runaway rise may not be seen because of the technical reasons mentioned and we may see the Markets forming a fresh area pattern before it breaks out on the upside. Given this reading, it is advised to continue to make selective purchases while paying equal or even more attention to protecting profits at higher levels. Overall, positive caution is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com