Daily Market Trend Guide -- Thursday, October 01, 2015

MARKET REPORT                                                                                September 30, 2015

The Markets witnessed a steady up today after opening on a positive note and it ended the day with decent gains as well. The Markets saw a better than expected opening in the morning as it opened on a higher note. It spent the first half of the session trading in a narrow range but continued to maintain its opening gains. It was the second half of the session that the Markets saw some more strength coming in. The Markets went on to form the day’s high of 7957.70 towards the end of the session. It did form these highs but overall it continued to remain in the broad rectangle trading range that it has been in since couple of weeks. Markets maintained these levels and finally ended the day at 7948.90, posting a decent gain of 105.60 points or 1.35% while forming a higher top and much higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, OCTOBER 01, 2015

The Markets are at very critical juncture today. We can expect the Markets to open on a decently positive note. However, this expected but imminent positive opening will see the Markets opening or trading near its very critical resistance zone of 7960-8000 levels. The Markets have a very critical and multiple pattern resistances at 7960-8000 levels and further and it would be critical to see if the Markets moves past them successfully. It would take Markets good amount of participation while on its way up to make a sustainable attempt to reverse its trend.

For today, the levels of 8000 and 8060 will act as immediate resistance for the Markets. The supports come in at 7875 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.7506 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high but NIFTY has not yet and this is Bullish Divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have shed over 1.71 lakh shares or 0.91% in Open Interest. Individually speaking, this figure is insignificant but it has certainly shown some amount of short covering involved in the trade yesterday.

While looking at patterns, pattern analysis makes it evident that the Markets still continue to remain in a broad trading range and have currently closed below its key resistance levels as of yesterday. The Markets face formidable multiple resistances ahead in terms of the breach supports on its way down and the Gap that it created couple of weeks back. All these will act as major pattern resistances on its way up. The Markets are likely to face serious resistance at 8000-8060 levels. It will have to move past these levels and attempt to fill up the gap that it had created. In nutshell, though the Markets have shown decent up moves it still remains much in the woods and it requires up moves with conviction and volumes to move  past its key pattern resistances.

All and all, it is pretty evident that we are set to see a decently positive opening but at the same time also acknowledge the fact that the Markets will trade very near to its important and multiple pattern resistances. This will continue to keep the Markets vulnerable to seeing profit taking at higher levels.  Also when today is the last working day of the Week once again, we can see some consolidation at higher levels. It is strongly advised to use any available up moves to book and protect profits at higher levels while continuing to keep purchases at moderate levels.

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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