Daily Market Trend Guide -- Wednesday, November 04, 2015

MARKET REPORT                                                                          November 04, 2015

Markets failed to capitalize on its stronger opening yesterday and continued to remain very volatile while it ended the day with minor gains. The Markets saw a good positive opening and traded with modest gains in the morning trade. It formed its day’s high of 8100.35 in the morning trade but spent much of the first half trading in sideways trajectory. The afternoon trade saw the Markets slipping from its highs and at one point pared all of its morning gains to trade flat. It also went on to dip into negative territory forming day’s low of 8031.75. Markets came off nearly 70-odd points from the high point of the day. The last hour and half of the trade saw some recovery coming in once again but the Markets did not sustain that and once again pared gains to trade flat. It finally ended the day at 8060.70, posting a minor gain of 9.90 points or 0.12% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, NOVEMBER 04, 2015

We had mentioned in our yesterday’s edition that the Markets have attempted to form a bottom near its 50-DMA which coincides with its important pattern support, the Markets are slated today to open on a near gap up note. However, in the same breadth, the analysis for today continues to remain on similar lines and it would be important to see if the expected good opening is not sold into and the Markets manages to capitalize on its expected strong opening.

For today, the expected levels of immediate resistance are 8125 and 8180 levels. The supports exist at 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.3525 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have added over 59,625 shares or just 0.31% in Open Interest. This can be interpreted as nearly unchanged figure. The NIFTY PCR stands at 0.90 as against 0.88 yesterday.

While having a look at pattern analysis, the Markets now exists between important pattern supports of 8050 and 8010 levels. The lower end of this trading range remains more important as it coincides with the levels of 50-DMA just below this. Therefore, in event of any consolidation, it would remain very much important for the Markets to remain above this critical level of 8000-8010. Today’s opening is likely to see it opening well above 8120 levels and it will not be surprising if the Markets attempt to test its another pattern resistance near 8200 levels in coming day. However, in order to do this, it would be important for the Markets to capitalize on each on expected strong opening. It would be critical to see that the rally does not gets sold into.

All and all, we continue to remain on our overall opinion of refraining from shorts even at higher levels. Though any significant up moves should be utilized to protect profits at higher levels. Dips / consolidation should be continued to be used for making selective purchases. However, the Markets will tend to oscillate in a broad range until it moves past 8200 levels. Overall, continuance of positive outlook is advised for today.

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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