Daily Market Trend Guide -- Thursday, September 24, 2015

MARKET REPORT                                                                                September 24, 2015

Markets fared exactly as analyzed in our yesterday’s edition as it opened much lower but recovered during the rest of the session to end the day with modest gains. The Market saw a near gap down opening following weak global cues and formed its intraday low of 7723.25 in the early minutes of the morning session. Though the Markets did spent some time trading in a sideways range but then converted itself into rising trajectory and remained so throughout the session. The Markets spent the first half of the session recovering most of its gains and traded near its previous close by then. The second half also saw the Markets strengthening further as it went on to rise and formed its intraday high of 7882.90. It came off from those levels but finally ended the day at 7845.95, posting modest gain of 33.95 points or 0.43% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, SEPTEMBER 24, 2015

Today, we enter the expiry day of the current derivative series and just like previous two sessions, the Markets are likely to remain dominated with rollover centric activities. Speaking purely on technical terms, the Markets are slated to open on a modestly lower note and look for directions. There are chances that we may see some weakness persisting but overall, the Markets are likely to trade in a given broad range with some possibilities of volatility remaining ingrained in the Markets following rollovers.

For today, the levels of 7880 and 7930 will act as immediate resistance levels for the Markets. The supports come in at 7790 and 7730 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.7841and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, rollovers continued as the NIFTY September series shed over 24.17 lakh or 13.61% in Open Interest. The October series added over 22.61 lakh shares or 18.46% in Open Interest. Overall, net open interest reduction of over 1.56 lakh shares was seen. This once again signifies that there was a short covering form lower level in the Markets.

Coming to pattern analysis, the Markets have attempted to form a base near 7700-levels and have attempted to pullback form there. However, it is extremely important to note that the Markets have shown just faint indication of possible bottom formation but in no way it has shown any confirmatory signs. This continues to keep the Markets in a broad trading range and also it continues to keep Markets below its key resistance zone of 7960-8000 levels. This structure on the technical chart continues to keep the Markets vulnerable to selling bouts from higher levels.

Overall, the Markets may see a stable opening and it can even see some improvement as we go ahead in the session. However, the expiry is likely to keep the Markets volatile and the technical factors will continue to keep the Markets vulnerable from sell offs at higher levels. However, given the feeble signs of bottom formation that the Markets have shown, we continue to reiterate to refrain from creating any short positions in the Markets. While utilizing downsides to make very moderate purchases, 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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