Daily Market Trend Guide -- Thursday, November 19, 2015

MARKET REPORT                                                                            November 19, 2015

The Markets took a bearish undertone, especially in the second half of the session as it ended the session with a decent cut. The Markets saw a quiet opening on expected lines and traded subdued and in a capped range in the morning trade. It spent the entire first half of the session was spent in the sideways trajectory trading in a very narrow and capped range. Markets headed nowhere in the first half and it just consolidated in a sideways trajectory. It was the second half that dealt a blow to the Markets. The Markets saw a sudden and sharp paring of gains in the second half and this continued until the end of the session. The Markets went on to form its intraday low of 7725.05 in the last hour of the trade. It traded sideways again and no recovery of any magnitude was seen.  Markets finally settled the day at 7731.80, posting a net loss of 105.75 points or 1.35% while forming a lower top and sharply lower bottom on the Daily Charts.

MARKET TREND FOR THURSDAY, NOVEMBER 19, 2015

Technical rebound is likely once again today after yesterday’s sharp decline. Markets are likely to open on a positive note and look for directions. The technical structure remains somewhat weak and it would be critically important to see if the Markets maintain its opening gains and capitalize on it as we go ahead in the session. Markets are not completely out of woods. Though technical rally cannot be ruled out today and in couple of days ahead, the Markets are not completely out of woods until it confirms its bottom.

For today, the levels of 7785 and 7840 will act as immediate resistance for the Markets. The supports come in at 7725 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 32.1928 and it does not show any failure swing. The NIFTY has formed its fresh 14-day low but RSI has not and this is bullish divergence. The Daily MACD remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY November futures have added over 6.52 lakh shares or 3.84% in Open Interest. There has been addition in short positions with yesterday’s decline. The NIFTY PCR stands at 0.71 as against 0.72.

Coming to pattern analysis, the Markets once again moved yesterday towards one of its important pattern support levels of 7680. So far, the Markets continues to trade above this critically important support level of 7680 and today’s positive opening is likely to keep Markets well above that. The nearly oversold nature of the Markets and the immediate indications from the lead indicators suggest that the Markets will once again have relief technical rebound from these levels. However, if we extend the reading to couple of days more ahead of us, it is equally likely that the Markets once again see some selling pressure from higher levels.

Overall, technical rebound is likely but the Markets are expected to continue to remain in a broad range. It will certainly see a technical pullback and as of now it has not breached any of its important support levels as well. However, the key would be to see if the Markets build up on its opening gains. Also in coming days, it would be equally important to see if the Markets forms and later confirms its bottom. Until then, it is most likely that the Markets trade in a broad range remaining vulnerable to selling pressure 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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