Daily Market Trend Guide -- Wednesday, November 18, 2015

MARKET REPORT                                                                            November 18, 2015

The Markets had a little volatile session yesterday as it oscillated in a 60-point range to finally end the day with modest gains. The Markets saw a quiet and modestly positive opening but it traded in a narrow range in the positive trajectory in the morning trade. However, the first half of the session saw the Markets drifting on the downside and by afternoon, the Markets pared all of its gains to trade in the negative territory. It went on to slide some more to form the day’s low of 7793. It was the second half of the session that saw the Markets rebounding very sharply. It not only came off its lows but traded back in positive territory. Further to this, it went on to form the day’s high of 7860.45 in the final hour of the trade. After coming off a bit from there, the Markets finally settled the day at 7837.55, posting a net gain of 30.95 points or 0.40% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, NOVEMBER 18, 2015

Analysis for today remains more or less on similar lines that of yesterday. Reason being, the Markets are expected to open on a quiet note and it has been displaying lack of conviction and participation while pulling back. This may keep the Markets a range movement with some intermittent downsides as well. Today, post quiet opening, the intraday trajectory that it forms and the levels of yesterday’s low would be important to watch out for.

For today, the levels of 7860 and 7910 are immediate resistance levels for today. The supports come in at 7790 and 7745 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.6376 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have further shed over 1.56 lakh shares or 0.91% in Open Interest. The NIFTY PCR stands a t0.72 as against 0.71 levels. The reduction of Open Interest conveys one fact that there is clear discomfort in the Markets at the levels of 7750-7800 zones as it gets nearly oversold by then. However,  it also points out to a fact that the OI drops with any upside and this also shows that though the Markets are supported by short covering at the lower levels, it certainly lacks the conviction of a fresh buying.

Coming to pattern analysis, the Markets have so far held the pattern support levels of 7680 as it has attempted a rebound / pullback from 7714 levels. However, as mentioned above, the technical pullbacks have seen lower volumes and also a reduction in OI. This keeps the Markets little vulnerable to some more range bound movements and some intermitted selling bouts. However, so long as the Markets rule above 7680 levels, there wont be any significant downward breach in the Markets.

Overall, though the Markets have been little less strong that what it should have been otherwise during a technical pullback, it has not displayed any structural technical breach on the Charts. However, given the lack of conviction on the upside, we continue to reiterate to restrict fresh buying only to selected stocks and keep high vigil over existing profits, if any. Cautious 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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