Daily Market Trend Guide -- Thursday, October 15, 2015

MARKET REPORT                                                                                   October 15, 2015

The Markets remained heavily under consolidation and ended the day with modest losses once again after oscillating in a narrow 25-odd points range. The Markets saw a modestly negative opening but after that it managed to crawl back into the positive territory in the first hour of the trade. The Markets also formed its intraday high of 8139.30. However, by not being able to capitalize on this, the Markets slowly gave up these modest gains and slipped into the negative. While remaining in downward sloping channel, the Markets formed its intraday low of 8096.35 in the afternoon trade. The second half of the Markets saw somewhat sharp recovery from lower levels. The Markets recovered all of its losses but it did so on very less volumes. This recovery was again, not sustained, and the Markets slipped back to its lower levels once again. It finally ended the day at 8107.90, posting a net loss of 23.80 points or 0.29% while forming a lower top but slightly higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, OCTOBER 15, 2015

Though the Markets have held on to its 50-DMA levels at Close, they are not so comfortably out of the woods as yet. The consolidation is likely to continue and following this, the Markets are set to see a modestly positive opening today. However, post opening, as always, it would be critical to see if the Markets attempts to capitalize and build on its positive opening or ends up consolidating again by paring gains during the day.

For today, the levels of 8140 and 8210 will act as immediate resistance for the Markets. The supports come in at 8075 and 8000 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.0436 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, the NIFTY October futures have shed over 13.04 lakh shares or 6.19% in Open Interest. This is clear offloading / unwinding of positions that appear to have happened. This is likely and enough to cause the Markets to consolidate for some more time to come. The NIFTY PCR stands at 1.00.

While having a look at pattern analysis, the Markets continue to trade in a range above its 50-DMA and one of the pattern resistances it broke on the upside, and between 100-DMA and the upper end of the “gap” which it created in the first week of September. The Markets have been oscillating in this broad range for a while now. It is important to note that any fresh up move shall take place only above the levels of 8230. Any movement in between this would be mere oscillations. Any breach on the downside may cause the Markets to retest its earlier pattern supports.

All and all, while the Markets are struggling to confirm its reversal that it has attempted over this month, we advise to keep the overall exposure limited in this Markets which are currently devoid of any directional bias. The Markets may test its important pattern supports once again. However, we also continue to reiterate to refrain from shorts as Markets have multiple supports on the downside and use downsides to make moderate purchases on selective basis. Overall, while remaining light on positions, cautious outlook should be continued on 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

+91-98250-16331
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