Daily Market Trend Guide -- Friday, September 11, 2015

MARKET REPORT                                                                             September 11, 2015

Markets had a terribly volatile session as it opened lower though recovered in the second half of the session to end with modest losses. The Markets saw a gap down opening which as worse than expected. Markets opened some 125-odd points lower and slipped lower in the morning trade to form the day’s low of 7678.50. However, from late morning trade until afternoon the Markets attempted to gradually recover from the low point of the day. It managed to recover bulk of the opening losses by afternoon but saw some sudden weakness creeping in again which took is nearly back to the morning levels. It was last hour and half of trade that saw some sharp surge coming in, mainly on back of short covering. The Markets recovered some 100-odd points from the low point and at one point recouped all of its losses. It finally settled the day at 7788.10, posting a modest loss of 30.50 points or 0.39% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, SEPTEMBER 11, 2015

We can fairly expect to have a relatively quiet day today. The Markets are expected to open on a quiet note and look for directions. Attempts to a modest up move cannot be ruled out but at the same time, the quantum of caution would increase as we move up wards. With any up move, below 7960-8000 levels the Markets will remain in a broad trading range with corrective bias.

For today, the levels of 7820 and 7860 will act as immediate resistance. The supports come in at 7670 and 7620 levels.

The RSI—Relative Strength Index on the Daily Chart is 40.7964 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bearish as it continues to trade below its signal line. However, it is moving towards attempting a positive crossover.

On the derivative front, the NIFTY September futures have added over 4.73 lakh shares or over 2.13% in Open Interest. This point towards heavy short covering from the low point of the day yesterday and also point towards some fresh buying as well. The NIFTY PCR stands at 0.95 as against 0.94.

Coming to pattern analysis, as we have mentioned in our yesterday’s edition of Daily Market Trend Guide, a gap was created a day before while the Markets opened gap up and ended higher. We had mentioned that that such gap is insignificant as they occur within a formation and often tend to get filled up. Exactly on these expected lines, the Markets filled up that gap as evident on the Daily Chart.  Today, we may open a bit higher and even continue to edge upwards towards its key resistance zone once again. However, we would still continue to trade in a given range with all possibilities of selling pressures from higher levels.

All and all, the Markets may open stable and remain positive today but uncertainty will remain in the air until we move past important global events like US Fed rate decision. Speaking purely on technical grounds, the Markets have attempted to form a base but have shown no signs of confirmation as of today. While keeping this in view, fresh purchases may be made but extremely on selective basis and with very tight protective stops. Overall, continuation of cautious approach is advised for today.

Milan Vaishnav,

Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

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