Daily Market Trend Guide -- Tuesday, October 13, 2015

MARKET REPORT                                                                                October 13, 2015

The Markets continued to show healthy consolidation yesterday as well as it continued to resist to its congestion zone and came of the opening highs to end the day with modest losses. The Markets saw a modestly positive opening which had the Markets open in their congestion zone. The Markets formed its intraday high of 8244.50 in the very early seconds of the trade and soon came off from those levels in the morning trade to trade flat. The Markets saw itself heading nowhere at least in the first half and saw itself trading around its previous close. The second half of the session saw some more weakness creeping in. The Markets lost some ground further and went on to form the day’s low of 8128.20, coming off nearly 115-odd points from the high point of the day. It finally settled the day at 8143.60, posting a modest loss of 46.10 points or 0.56% while forming a slightly higher top but lower bottom on the Daily Bar Chart.

MARKET TREND FOR TUESDAY, OCTOBER 13, 2015

The Markets have continued to resist to its congestion zone yesterday and today as well this zone will continue to pose as important resistance levels for the Markets. This keeps the analysis more or less on similar lines again as we can expect the Markets to open on a flat note today as well and look for directions and react to macro data which came out yesterday which remained somewhat better than expected. In any case, the congestion zone between the 50-DMA and the 100-DMA / upper band of the gap will continue to remain important pattern resistance.

For today, the levels of 8215 and 8250 will continue to remain immediate resistance for the Markets. The supports come in at 8092 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 57.3856 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, and Engulfing Bearish Pattern has occurred. This formation is a potential signs that the Markets may continue to resist to this zone for some more time to come.

On the derivative front, the NIFTY October futures have added over 5.94 lakh shares or 2.80% in Open Interest. This clearly points finger towards addition of short positions in the Markets. The NIFTY PCR stands at 1 as against 1.02 yesterday.

While having a look at pattern analysis, the Markets have been consolidating in a ranged manner after moving past its resistance levels of 8000-8062 levels. The Markets have now resisted to the congestion zone created by the upper end of the “gap” that the Markets created in first week of September and also to the 100-DMA levels that falls just around that. The Markets have been oscillating in  range bound manner in this zone after some 450-odd points of rise in six straight sessions. The Markets would see a sustainable up move once its moves past these levels. Until this happens, we will continue to see the Markets oscillating and consolidating. However, major downsides are unlikely as suggested by overall pattern analysis and as supported by F&O data.

Overall, the Markets are once again set to see a flat opening. The Markets will also continue to oscillate while attempting to move up again towards the upper end of the congestion zone. The F&O data suggests limited downside and therefore we reiterate our advice to make selective purchases on every corrective dip. In the same breadth, since the Markets are yet to move out of the congestion zone, any existing profits may be vigilantly protected at higher 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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