Daily Market Trend Guide -- Friday, October 09, 2015

MARKET REPORT                                                                       October 09, 2015

Markets snapped its six-day winning streak as it opened lower and ended the day with modest losses while continuing to consolidate. The Markets saw a quiet opening and opened modestly into the positive and formed its intraday high of 8196.75 in the early minutes of the trade. The Markets thereafter slipped gradually into negative territory. It went on to slip further into the red by afternoon trade. The Markets spent most of the time by until late afternoon trade remaining in sideways trajectory while maintaining its modest losses. It went on to also form its intraday low of 8105.85 by then. It was the last hour and half of the trade where the Markets attempted to make a modest recovery. It saw some minor recovery off its intraday lows but that remained limited. The Markets finally settled the day at 8129.35 posting a modest loss of 48.05 points or 0.59% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, OCTOBER 09, 2015

The Markets are likely to remain in corrective mode today as well and there are chances that we may see one more day of consolidation on the Charts. The Markets are expected to open on a relative quiet mode but the levels of 50-DMA would be important to watch out for. It would be important for the Markets to maintain itself above these levels failing which it is likely to test its important pattern support.

For today, the levels of 8180 and 8230 will continue to act as immediate resistance whereas the support would come in at 8100 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.6893 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line. On the Candles, an Engulfing Bearish Pattern has occurred. Since this pattern has occurred after an up move, it is likely temporarily pause this up move and cause the Markets to consolidate.

On the derivative front, the NIFTY October futures have shed nominal 3875 shares or 0.02% in Open Interest. With total OI remaining nearly unchanged, it continues to portray underlying resilient undertone in the Markets.

Coming to pattern analysis, the Markets are continuing to consolidate for the second day as well after rising nearly 450-odd points in six straight sessions. It is currently trades below its 100-DMA and above its 50-DMA. In event of any consolidation continuing to consolidate, the level of 50-DMA is expected to act as support. If the Markets breach this level, then it may test its important pattern support of 8060 levels but it seems less likely.

All and all, the Markets are likely to continue to consolidate, at least in the initial trade. However, even if it sees some more downsides, it comfortably trades above its important pattern supports. Further, the F&O data indicates underlying buoyancy and there are chances that the Markets attempts to resume its up move. Any consolidation / correction should be utilized to make fresh purchases. While keeping purchases selective, shorts should be avoided and cautiously positive outlook is advised for the day.

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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