Daily Market Trend Guide -- Wednesday, September 16, 2015

MARKET REPORT                                                                                September 16, 2015

Yesterday’s session remained very much on analyzed lines as the Markets gave back much of its previous day’s gain as it ended the day with modest losses. The Markets gave quiet start and soon crawled into the positive territory while forming the day’s high of 7880 in the early minutes of the trade. Thereafter the Markets very quickly pared its gains as it drifted into negative territory. The session remained volatile to some extent but the Markets continued to remain in a downward trajectory for the entire session. By afternoon trade, it saw a sharp dip which took it to from the day’s low of 7799.75. Some minor recovery was seen in the last hour of the trade but the Markets finally settled the day at 7829.10, posting a modest loss of 43.15 points or 0.55% while forming a similar top but slightly higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, SEPTEMBER 16, 205

Aided by positive global cues, the Markets are likely to open on a decently positive note and trade with gains in the initial trade. However, tomorrow being a trading holiday and with the pending FOMC decision on rate hike in the US, we are likely to see larger degree of caution prevailing in the Markets. This may cause the Markets come under some pressure, especially in the second half of the session. Even if we do not see any downsides today, any higher opening and trading levels will continue to keep the Markets vulnerable to selling bouts from higher levels.

For today, the levels of 7880 and 7945 will act as resistance levels for the Markets. The supports come in at 7800 and 7720 levels.

The RSI—Relative Strength Index on the Daily Chart is 43.1599 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY September futures have shed 81,675 shares or nominal 0.37% in Open Interest. This is no indication of any major shift in directional psyche of the Markets.  The NIFTY PCR stands at 0.93 as against 0.94 yesterday.

Coming to pattern analysis, the Markets have formed near parallel bars, and if not a perfect parallel bars on the Daily Bar Charts. This indicates that after forming a lower low earlier this month, the Markets have pulled back but have formed lower high so far. Also, speaking on little broad terms, the Markets are still trading below its key resistance zones of 7960-8000 levels. Every move that takes the Markets near to these levels has met with some selling pressure. All this has happened without volumes and lack of buying at higher levels.

All and all, the Markets hover with uncertainty so far as interest rate hike decision in US is concerned. Also, with a trading holiday tomorrow, it will not be surprising if the Markets remain ranged or face some pressure at higher levels post opening. It would be grossly important for the Markets to capitalize on its expected opening gains. Overall, the continuation of having very modest and selective exposure with more conservation of cash 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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