Daily Market Trend Guide -- Friday, October 30, 2015

MARKET REPORT                                                                                       October 30, 2015

The Markets wore a bearish outlook throughout the session yesterday as it continued to end the day with losses on the expiry day of the October series. The Markets opened on modestly lower note but slipped further to align itself with global markets. However, the losses were as such limited as the Markets spent the first half of the session trading in sideways trajectory while attempting to limit its losses. It was the second half that saw the Markets weakening further. The Markets then pared some more ground as it gradually made lower lows. It went on to form the low point of the day at 8098 in the last hour of the trade. No major recovery was seen and the Markets settled the day at 8111.75, posting a net loss of 59.45 points or 0.73% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, OCTOBER 30, 2015

Markets have remained particularly dominated with rollovers, especially since last two sessions. Today, we can expect the Markets to open on a flat note and may trade in a range in the initial session. The Markets have slipped back into its broad consolidation zone of 8050-8220 and it would now be a while as the Markets will consolidate to attempt an up move again. In event of any weakness, the levels of 8050 would again become critical to watch out for.

For today, the levels of 8150 and 8210 are immediate resistance levels for the Markets. The supports come in at 8050 and 8023 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.6514 and it has reached its lowest value in last 14-days which is bearish. The RSI has set a  fresh 14-period low where as NIFTY has not yet and this is Bearish Divergence. As expected in our yesterday’s edition, the Daily MACD has reported a negative crossover and it is now bearish as it trades below its signal line.

On the derivative front, the NIFTY and Market Wide rollovers have remained strong and above its last 3-series average. The NIFTY November series began adding Open Interest of 42.06 lakhs shares or 30.88% and has begun the series with NIFTY PCR at 0.86 as against 1.04.

Coming to pattern analysis, as we had mentioned in our previous edition of Daily Market Trend Guide, the Markets have slipped back into the trading range that it was previously in the month of October. This range is bit broad ranging nearly 170-odd points (8050-8220) and therefore, it can once again cause the Markets to move and oscillate within this range. In event of any weakness, it  would not be surprising if the Markets tests its lower bottoms but in the same breadth, it is very much unlikely that the Markets will see any significant downside breach in the immediate short term.

Overall, the Markets may remain subdued and range bound but is not likely to see any significant breach on the downsides. However, given the fact that the Markets are back into the broad trading range, some directionless oscillation within this range may not be ruled out. It is advised to continue to refrain from shorts and continue to utilize the dips to make modest quality purchases.

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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