Daily Market Trend Guide -- Tuesday, September 01, 2015

MARKET REPORT                                                                                        September 01, 2015

Markets had a somewhat uncomfortable and disappointing session as it ended the day with modest losses after failing to maintain itself above the 7960-8000 zones. The Markets saw a modestly negative opening on expected lines and spent the morning session in a sideways trade. It was the late morning trade that the Markets saw itself recovering from its opening lows. It recovered all of its morning losses and later traded in the positive territory. It went on to form the day’s high of 8043.60. The Markets however failed to maintain these levels and returned to trade flat once again. After spending the afternoon session once again in sideways trajectory, it dipped once again into negative territory and this time went on to form the day’s low of 7947.95, coming off nearly 96-odd points from the high point of the day. Some minor recovery was seen and the Markets finally settled the day at 7971.30, posting a modest loss of 30.65 points or 0.38% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, SEPTEMBER 01, 2015

We had mentioned in our earlier edition of Daily Market Trend Guide that despite a sharp sell off just couple of day’s back, the Markets are not yet completely out of the woods as yet. Our apprehension holds true today as the Markets are once again slated to open on a negative note, in fact much lower than its important 7960-8000 resistance zones and will look for directions. The Markets anyway have weak structure, technically speaking, and the slightly lower than expected GDP numbers and deficit numbers will aid the ailing sentiment.

For today, the levels of 8000 and 8045 will act as immediate resistance levels for the Markets. The supports come in at 7910 and 7850 levels.

The RSI—Relative Strength Index on the Daily Charts is 37.3220 and it continues to remain neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD too remain bearish as it trades below its signal line.

On the derivative front, the NIFTY September futures have added over 1.25 lakh shares or 0.57% in Open Interest. There at least a solace that no major unwinding has been reported from higher levels on its way down. In fact, some nominal shorts have been added so for.

Coming to pattern analysis, while pulling back, the Markets have failed to maintain itself above 8000-level and today, as it is slated to open lower, the levels of 7960-8000 zones will continue to act as resistance for the immediate short term. So long as the Markets do not move past these levels and maintain itself above that, it will continue to remain volatile with a downward bias and without any upside conviction. It will continue to portray a bearish undertone so long as it continues to trade below its key pattern resistance of 7960-8000 levels.

All and all, the Markets are slated to open lower and will attempt to find base post lower opening. In last couple of sessions, the Markets have added good amount of Open Interest which indicates existence of shorts in the system. Though the Markets may not make fresh lows, it will continue to remain volatile at any given levels. There is also possible that these shorts itself lend some support to the Markets at lower levels. In any case, the Markets, as of now, completely lacks any kind of directional bias. It is advised to refrain from taking any major exposures until the directional bias gets definite.

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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