Daily Market Trend Guide -- Friday, December 19, 2014

MARKET REPORT                                                                           December 19, 2014

Markets saw a strong technical rebound on back of positive global cues and oversold technical indicators and ended the day with decent gains. The Markets saw a nearly gap up opening as it opened strong. However, the morning trade saw some paring of opening gains as the Markets retraced from the opening highs later in the morning trade. However, the second half of the session saw the buoyancy returning the Markets as the Markets strengthened further to touch the opening levels again. It further went on to form the day’s high of 8174.30 towards the end of the session. These levels were sustained and the Markets finally ended the day at 8159.30, posting a net gain of 129.50 points or 1.61% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, DECEMBER 19, 2014

The remains crucial again as the trend of the Markets would decide if the Markets would continue with its pullback or not. The Markets have ended the day near a pattern resistance. Technically speaking, we can expect a positive start to the session and the Markets are likely to trade positive in the initial trade. It would be important for the Markets to open and trade above 8165 levels in order to successfully continue with the pullback.

The levels of 8175 and 8230 (50-DMA) would act as immediate resistance for the Markets. The supports would come in at 8064 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.9828 and it has just moved above from bottoming area which is bullish. It does not show any bullish or bearish divergence or failure swing. The Daily MACD still remains bearish while trading below its signal line. On Candles, A morning star occurred (this is a three-candle pattern).  This is a bullish pattern that often signifies a major bottom.

On the derivative front, the NIFTY December futures have shed over 19.20 lakh shares or over 8.02% in Open Interest. This very clearly signifies that there has been a heavy short covering from lower levels which has fuelled this pullback. It would be extremely important to see that this gets replaced with a fresh buying from here on.

Taking a cue from pattern analysis, the Markets have held on to support at its 100-DMA at Close levels. Though the Markets have seen a technical bounce back, it still faces resistance at 50-DMA. This is the support that the Markets broke on its way down and therefore would act as resistance on its way up. It would be very necessary that the Markets add Open Interest as it is extremely important for the Markets to see fresh buying in order to continue with its pullback. Mere short covering fuelled rallies will not take the Markets much further.

Going on from here, it is extremely necessary to remain highly watchful in the Markets. The Markets have taken a first step towards by giving a technical pullback. It would be necessary that it sees fresh buying going ahead. As the Markets are not yet completely out of the woods, it is necessary to remain highly selective in making fresh purchases. In order to avoid intermediate weakness, it would be necessary for the Markets to move past and close above its 50-DMA. Overall, while maintaining liquidity, positive caution is continued to be 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, December 18, 2014

MARKET REPORT                                                                          December 18, 2014

Markets ended the day in the red for the fifth session in a row but also survived a scare in the early morning trade is come off quite a bit from its lows before ending with modest losses. The Markets saw a flat and quite opening and after opening saw a sharp selling pressure in the morning trade. The Markets went down to make the day’s low of 7961.35 in the late morning trade. However, the rest of the session saw a technical rebound as the Markets gradually recovered all of its gains. It recovered over 110-odd points from the lows of the day and also went to trade into the green for a brief time while it formed the intraday high of 8082. It came off a bit again but this time traded in a capped range without posting much losses and finally settled the day at 8029.80, posting a net loss of 37.80 points or 0.47% while continuing to form a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, DECEMBER 18, 2014

The session remains a very crucial one as the Markets have closed a notch below its 100-DMA. However, we can expect a modestly positive opening in the Markets as they remain oversold and a technical rebound remains imminent. The levels of 8059 remains crucial and it would be important for the Markets to move past and sustain above 8060 levels in order to avoid any further weakness.

The levels of 8060 and 8130 would act as immediate resistance for the Markets. The supports would come in at 7960 and 7910 levels.

The RSI—Relative Strength Index on the Daily Chart is 28.1640 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence and it now trades in “oversold” area. The Daily MACD remains bearish as it continues to trade above its signal line.

On the derivative front, NIFTY December futures have added modest 12,400 shares or nominal 0.05% in Open Interest. There have been no major unwinding or shorts were seen in the system.

Taking a look at pattern analysis, the Markets have lost nearly 650-odd points of NIFTY in last couple of sessions while resisting to a upper rising trend line of a broadening formation. During this phase, the Markets have now formed a intermediate top at 8623 levels. However, it has seen over 66% retracement and forms a good case for a technical rebound. The constant addition of short positions and the “overbought” nature of the Markets will aid to this.

Overall, the Markets are due for a technical rebound at any time. It has attempted one while recovering from the lows and is likely to continue its effort as well. It can mildly resist to the 100-DMA levels of 8059-60 but it is likely that it would move past this level. It is critically important for the Markets to move past this level in order to successfully attempt an up move. While very small amounts of selective purchases may be made, overall, positive caution is advised while maintaining liquidity 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, December 17, 2014

MARKET REPORT                                                                        December 17, 2014

The Markets had a terrible day as it went on to further correct and tested its 100-DMA before ending the day with a deep cut. The Markets saw a negative opening following weak technical and even weaker global cues. Post opening on a negative note, the Markets never really attempted even once to move upwards. It remained in a falling channel and remained in negative trajectory for the entire session while it kept making fresh lows gradually but consistently. Though a very mild attempt to recover from the lows of the day was made in the late afternoon trade but weakness returned to the Markets with even greater force as it went on to form the day’s low of 8052.60. Virtually no attempt to recover was made from here as well and the Markets finally ended the day at 8067.60, posting a deep cut of 152 points or 1.85% forming a sharply lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 17, 2014

Markets now sit at a great possibility of a technical rebound. It has taken support at 100DMA, which is one of the major support levels and also, at the same time, have got “oversold”. Having said this, we can expect a positive opening in the Markets. In event of a weaker opening, we can expect the Markets to attempt a rebound from lower levels. Until broken, the levels of 100-DMA would continue to act as major support at Close levels.

The levels of 8095 and 8140 would act at immediate resistance. The supports would come in at 8050 and 7990 levels.

The RSI—Relative Strength Index on the Daily Chart is 29.7520 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence and it now trades in “oversold” area. The Daily MACD remains bearish trading below its signal line.

On the derivative front, the NIFTY December futures have added over 4.03 lakh shares or 1.72% total open interest. This signifies that there are big amounts of shorts that exists in the system.

Taking a cue from pattern analysis, the Markets have very sharply corrected itself from a broadening formation. As we have often on number of times that such formations are observed during major top formations. Further,  given such formation, the Markets correction becomes imminent and this is what precisely that has happened. After forming an immediate top of 8623, the Markets have corrected nearly 571 pints NIFTY.

Overall, while NIFTY has corrected over 570-odd points from its lifetime highs, the Markets now attempts to take support at its 100-DMA. Further, over and above now trading in “oversold” area, the Markets is also sitting on significant amount of short positions. It has kept adding  to OI on its way down in almost all sessions. Given this, it sits very favourably on possibility of a technical rebound. Given this possibility, it is advised to now begin making selective purchases as even in event of some weakness,  a technical rebound can be expected.

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, December 16, 2014

We have not been able to come out with regular edition of Daily Market Trend Guide in PDF Format. However, Market Forecast for the  Day is reproduced below in brief. Inconvenience caused is sincerely regretted.

BRIEF MARKET FORECAST FOR THE DAY

The analysis once again continue to remain more or less on similar lines like yesterday. The Markets have continued to take support at its 50-DMA at Close levels. Today, we can once again expect a lower opening but at the same time we can also expect resilience from the Markets.

The RSI on Daily Chart is 37.6863 and it has reached its lowest value in last 14-day which is bearish. It does not show any bullish or bearish divergence. The Daily MACD trades below its signal line.

Overall, the Markets are likely to see lower opening but at the same time there are bright chances that it improves as we go ahead in the session. The supports would come in at 8150 levels again. It is once again advised to refrain from any fresh shorts and continue to maintain liquidity with positive caution in the Markets. A technical rebound is likely.

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, December 15, 2014

MARKET REPORT                                                                              December 15, 2014

Markets continued with its correction on Friday as well and went on to test its important support before ending the day with losses. The Markets saw positive opening and it traded positive in the morning trade. The early part of the session saw the Markets trading positive with capped gains as it remained sideways while it also formed its intraday high of 8321.90. The late morning trade saw the Markets drifting slowly into the negative territory. Even with the Markets trading negative since late morning session, it remained more or less range bound with very limited losses. The second half of the trade saw some selling pressure getting intensified as the Markets resumed its fresh downside move. It saw steady paring of gains in the second half of the session. The Markets went on to form the day’s low of 8216.30. With no major recovery being seen, it finally ended the day at 8224.10, posting a net loss of 68.80 points or 0.83% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, DECEMBER 15, 2014

On Friday, the Markets have went on to test its important support levels of 8216 in form of its 50-DMA. Today, the Markets would open reacting to weaker than expected IIP data and also the CPI inflation data which came out little better. However, we can once again expect a negative opening in the Markets. However, it is likely that we see some improvement with the levels of 50-DMA holding out as support as shorts have also continued to get piled up.

The levels of 8250 and 8295 are immediate resistance levels for the Markets. The supports exists at 8216 (at Close levels) and further down at 8150.

The RSI—Relative Strength Index on the Daily Chart is 39.9646 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Daily MACD continues to remain bearish trading below its signal line. On the Weekly Charts, the Weekly RSI is 59.4184 and it has moved below from its topping formation. It does not show any bullish or bearish divergence or failure swings. The Weekly MACD has reported a negative crossover as it now trades below its signal line and its bearish.

On the derivative front, the NIFTY December futures have went on to add another 10.02 lakh shares or 4.53% in Open Interest. This goes on to indicate heavy piling of short positions in the system.

Taking a cue from pattern analysis, on the Weekly and Daily Charts, the Markets have retraced significantly after resisting to the rising trend line of the broadening formation. This formation is more clearly visible on the Weekly Charts. Having said this, it becomes important to point out that there has been no significant breach on the Charts as the Markets continue to trade above all of its DMAs.

Overall, even if we see a negative opening today, there are chances that the Markets improve as we go ahead in the session or at least shows some resilience. In event of closing below the 50-DMA levels, it is likely that it does not break it filter even after that. Given this scenario, it is advised that fresh positions should be restricted to selective stocks. Also, shorts should be avoided as no major breakdown in Markets is expected due the short positions that are being seen built up. Overall, cautious optimism 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