Daily Market Trend Guide -- Wednesday, September 30, 2015

MARKET REPORT                                                                              September 30, 2015

Markets witnessed enormous amount of volatile as it swung nearly 325-odd points during the entire day and ended the day with modest gains after reacting to higher-than-expected 50 bps rate cut by the RBI. The Markets opened expectedly on a lower note following weak global cues but remained much resilient in the initial trade. However, it became weak later in the afternoon as it formed its day’s low of 7691.20. However, it did not breach the support line that we mentioned in our yesterday’s edition of Daily Market Trend Guide and it remained sacrosanct.  It was immediately post RBI 50 bps rate cut that the Markets saw a sharp parabolic upswing. It recovered over 120-odd to recover all of its losses. It further went on to form the day’s high of 7926.55 by afternoon. However, it was the late afternoon trade that saw the Markets coming off once again. It pared some 100-odd points once again but finally ended the day at 7843.30, posting a modest gain of 47.60 points or 0.61% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, SEPTEMBER 30, 2015

The Markets have remained in a broad trading range after taking support near the prescribed pattern supports. Today, we can see the Markets opening on a modestly positive note and look for directions. They way the Markets have not breached its support levels, on the same lines; they are not completely out of the woods as well. They continue to remain in a broad trading range while still continuing to trade below its key resistance zone.

For today, the levels of 7910 and 7945 will act as immediate resistance for the Markets. The supports come in at 7790 and 7750 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.4254 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY October series have added over 2.25 lakh shares or 1.21% in Open Interest. The NIFTY PCR stands at 0.91 as against 0.90 yesterday. Some fresh shorts have been added as the Markets have reported net increase in Open Interest after coming off nearly 100-odd odd points from the high point of the day.

Coming to pattern analysis, the Markets have continued to remain in a broad trading range after yesterday’s pullback from lower levels. The pattern support of 7650-7670 level still hold good for the Markets. However, on the upside, the Markets continue to face resistance near its key resistance zone of 7960-8000 levels. The Markets have not been able to move past this zone after breaking it on the downside. Currently it continues to trade in a very broad trading range. The overall trend in the Markets remains sideways and due its  is broad trend, some good amount of volatility have continue to remain ingrained in it.

Overall, it is pretty clear from the technical charts that the Markets have failed to form any directional bias. It still continues to trade with uncertain bias and remains in a broad trading range. The key resistance zone of 7960-8000 levels still hold good for the Markets. There will be no sustainable up move until the Markets moves past this level. However, with the trading range remaining quite broad, the Markets too will witness some good amount of volatility as well. It is advised to continue to remain very modest on exposures and maintain liquidity in the Markets.

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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