Daily Market Trend Guide -- Monday, September 14, 2015

MARKET REPORT                                                                                 September 14, 2015

Markets remained heavily cautious before July IIP data which came in after markets hours on Friday as the Markets retraced from its opening levels to end the day absolutely flat with negligible gain. The Markets saw a stronger than expected opening once again as the Markets formed its intraday high of 7684.85 in the early minutes of the day. However, soon after this, the Markets traded itself in falling channel and remained in downward trajectory for the entire day. Though the Markets traded on low volumes, it kept paring gains gradually. By late afternoon trade, it had pared all of its gains while forming the day’s low of 7759.90 as the Markets dipped briefly into negative territory briefly. It finally settled the day on absolutely flat note as it ended the day at 7789.30, posting a negligible gain of 1.20 points or 0.02% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, SEPTEMBER 14, 2015

Markets are expected to open on a modestly positive note and look for gains at least in the initial trade. The Markets are expected to have a volatile week for number of reasons. Though the IIP numbers that came out on Friday pleasantly surprised, the WPI data is slated to come out later today and the Markets have a holiday on 17^th of September and will also resume Friday reacting to the rate-hike stance of FOMC. Technical speaking, the 

Markets continue to show a technical pullback but is yet to show any signs of bottom formation.

For today, the levels of 7850 and 7925 will act as immediate resistance for the Markets. The supports come in lower at 7730 and 7650 levels.

The RSI—Relative Strength Index on the Daily Chart is 40.8526 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The MACD on Daily Charts is bullish as it has expectedly reported a positive crossover and it now trades above its signal line. On the Weekly Charts, the Weekly RSI is 37.8267 and this too remains neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have shed 55,200 shares or 0.24% in Open Interest. This is a nominal change and does not indicate any major shift of positions on Friday. The NIFTY PCR stands at 0.93 as against 0.95.

Coming to pattern analysis, the Markets have created a gap in the end of August and formed its lows. In the subsequent pullback, the Markets failed to fill up that gap and went on to form fresh lows again in the first week of September. After this, the Market shave attempted a pullback once again but it still continues to trade below its key resistance zone of 7960-8000 levels. For the Markets to confirm a bottom, it will have to move past this resistance zone and fill up the gap created between 8064-8224 levels. These are little broad range but until the Markets moves past this resistance zone of 7960-8000 and attempts to fill up this gap, it will remain vulnerable to selling pressures at higher levels. On the Weekly Charts, the Markets have closed a notch above its 100-DMA and this level is likely to act as support on Close levels as well.

All and all, the Markets continue to remain in broad trading range. It is showing attempts at bottom formation but has shown signs of any confirmation so far. The technical fabric of Daily as well as Weekly Technical Charts continues to show vulnerability of the Markets at higher levels, especially at its key pattern resistance zones. Keeping this in view, it is advised to continue to hold not more than modest positions while very vigilantly protecting profits at higher levels.

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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