Daily Market Trend Guide -- Wednesday, October 28, 2015

MARKET REPORT                                                                                 October 28, 2015

Markets spent a lacklustre session, much on expected lines as it continued to consolidate while maintaining its support levels. The Markets saw a modestly negative opening in the morning, again on expected lines, and after briefly maintaining the levels of 8230 initially, slipped little further to form the day’s low of 8217.05. However, the Markets recovered again to trade near its support levels by afternoon trade. Thereafter, the most part of the session was spent in a very narrow 20-odd points range in sideways trajectory wherein the Markets headed nowhere. It did not test its 100-DMA which was very much in the vicinity of the low point of the day. The last half hour of the trade saw the Markets maintaining the levels of 8230. It finally settled the day at 8232.90, posting a modest loss of 27.65 points or 0.33% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, OCTOBER 28, 2015

The Markets continues to consolidate and thus continues to keep the analysis once again on similar lines. Today, we are set to see a subdued opening in the Markets and we will also see the session remaining dominated with rollover centric activities as we enter the penultimate day of the current derivative series. The levels of 8230 and 8204, which is the 100-DMA of the Markets will be crucial to watch out for as any dip below this will send the Markets again in the broad consolidation range.

For today, the levels of 8260 and 8290 will act as immediate resistance levels. The supports come in at 8204 and 8170 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.1513 and it remains neutral as it shows no bullish or bearish divergence. The Daily MACD continues to remain bullish as it trades above its signal line. An on-neck-line occurrence on the Candles makes this day potentially bearish if yesterday’s low is penetrated.

On derivative front, the NIFTY October futures have shed over 17.51 lakh shares or 10.38% in Open Interest whereas the November series saw over 26.36 lakh shares or 34.14% addition in Open Interest. Net OI addition is seen around 11 lakh shares and this shows inherent bullish undertone. The NIFTY PCR stands at 1.10.

While having a look at the pattern analysis, the Markets have their important pattern support at 8230 and further down at 8204 which is the 100-DMA of the Markets. The Markets will have to trade above these levels, at least 100-DMA, in order to keep its head above water. If the Markets are successful in maintaining itself above this, it would continue to consolidate in that congestion area. However, any breach below 8200 levels will see the Markets getting weaker for the immediate short term as it would send it again in the broad rectangle consolidation zone. Therefore, it would be imperative for the Markets to maintain itself above 8200 in order to avoid any further weakness.

Overall, as just mentioned, the levels of 8200 would be important to watch out for. Any breach below those levels at Close will bring in short term weakness in the Markets as it would return into its broad consolidation zone. The intraday trajectory, therefore, would be important to watch out for. Any dips should be continued to be used for making moderate selective purchases. While keeping exposures moderate, cautious optimism is advised for the day.

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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