Daily Market Trend Guide -- Thursday, October 08, 2015

MARKET REPORT                                                                              October 08, 2015

Markets traded much on the analyzed lines as it consolidated but ended the day with modest gains while ended the sixth day with gains. The Markets saw a modestly negative opening but though it opened negative it crawled back into the positive territory in the morning trade. Markets gained some further strength as it piled up modest gains in the late morning trade. However, it saw some corrective pressure from the higher levels; the Markets pared all of its gains by afternoon trade and dipped into the negative territory. It formed its intraday low of 8132.90 while doing so but it was the second half of the session that saw the recovery. The Markets not only recovered from its intraday low but went on to trade in the positive territory and even form the high point of the day at 8188.90. The Markets finally ended the day at 8177.40, posting a net gain of 24.50 points or 0.30% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, OCTOBER 08, 2015

Today’s analysis continue to remain on similar lines that of yesterday as the  Markets are once again likely to open on a flat note and consolidate as the day advances. With the opening expected flat, the Markets will continue to resist around mentioned levels and the intraday trajectory it forms would be critical to decide the trend for today. Over 450-odd points of rise in last seven straight session continues to keep the Market vulnerable to some range bound consolidation or minor profit taking bouts at higher levels.

The levels of 8195 and 8240 will continue to act as important pattern resistance for the Markets. The supports come in at 8130 and 8090 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.6534 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above its signal line.

On derivative front, the NIFTY has gone on to add yet another over 8.89 lakh shares or 4.38% in Open Interest. This very clearly indicates the bullish undertone and it is likely to keep the Markets restricted to just consolidation than any major profit taking. The NIFTY PCR stands at 1.03 as against 0.99.

Coming to pattern analysis, as mentioned in our yesterday’s edition, the Markets have managed to move past its important resistance zone of 7960-8000 levels and 8060. In event of any consolidation or minor profit taking bouts, these levels, which were resistance earlier, are not expected to act as support. On the upper side, the levels of 8240 would be important to watch out for as it is yet another important pattern resistance. Until the Markets moves past it, we will continue to witness ranged consolidation and minor profit taking bouts at higher levels.

Overall, the Markets are likely to consolidate as it is expected to open on a flat note. The Markets would also remain vulnerable to minor profit taking bouts from higher levels but at the same time, the undertone continue to remain evidently buoyant. So, any consolidation is likely to remain limited to range bound movement and no major correction should be seen. While keeping this in view, while protecting profits at higher levels, we continue to reiterate to make selective purchases as well.

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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