Gemstone Equity Research & Advisory Services: 11/8/15

Friday, November 13, 2015

Daily Market Trend Guide -- Friday, November 13, 2015

MARKET REPORT November 13, 2015

The Markets session on the Muhurat Trading remained typically as like any other muhurat session as the Markets opened higher, remained in a capped and narrow range but ended the day quite on a good positive note. The Markets saw a relatively stronger opening and formed its intraday high of 7847.95 in the early minute of the hour-long session. Soon after that, the Markets gradually kept paring gains but overall continued to maintain its gains. It spent the hour-long session in a relatively capped and narrow range. After spending the short session in 25-odd points range, the Markets finally settled the day at 7825, posting a net gain of 41.65 points or 0.54% while forming a lower top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, NOVEMBER 13, 2015

Markets are not completely out of the woods but the oversold nature of the Markets saw some positive upticks on expected lines on Wednesday. However, today, we are once again likely to see a negative opening in the Markets. However, the fact that any negative opening in the Markets will once again make the Markets oversold, the analysis continues to remain more or less on similar lines. This translates into possibilities of the Markets recovering once gain after a negative opening.

For today, the levels of 7850 and 7890 will act as immediate resistance levels for the Markets. Supports come in at 7775 and 7730 levels.

The RSI—Relative Strength Index on the Daily Chart is 33.1378 and it is neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the hour-long session on Wednesday, the NIFTY November futures have shed over 1.04 lakh shares or 0.59% in Open Interest. This shows continuation of some offloading and unwinding of positions in the Markets.

Having a look at pattern analysis, the Markets attempted to form some base near the levels of 7775. However, given the structure of the Charts, any continuing weakness will see the Markets testing its support levels of 7680 levels in the immediate short term. Again, it is important to note that the Markets will once again get nearly oversold any downsides at close levels. This will ensure that the Markets see little and limited downsides and does not make any significant breach on the Daily Charts.

Overall, with the lower opening expected, the Markets are once again set to test its immediate support levels. However, taking a combined look at the technical structure of the Market, its lead indicators and the F&O data, the chances remain that post negative opening; it will either attempt to recover as the day progresses or will keep its downsides limited. It is advised to keep exposures limited and maintain liquidity while adopting a cautious outlook on the Markets.

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

+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Wednesday, November 11, 2015

Daily Market Trend Guide -- Wednesday, November 11, 2015

MARKET REPORT November 11, 2015

Ahead of the Muhurat Trading session today, the Markets thoroughly disappointed as bearish undertone continued to weigh heavy on the Markets as it ended the fifth day in a row with losses. The Markets saw a negative opening but this negative opening was modest in the beginning as the Markets traded with modest losses in the morning session as it formed its intraday high of 7885.10 in the very early minutes of the trade. Thereafter, the Markets traded with capped losses, more in the sideways trajectory in the first half of the session. In the second half the Markets saw some more weakness creeping in and it got intensified in the last hour of the trade. The last hour saw a sharp paring of gains as the Markets formed its intraday low of 7772.85. It finally settled the day at 7783.35, posting a net loss of 131.85 points or 1.67% while forming a lower top and lower bottom on the Daily Bar Charts.

Muhurat Trading Session Timings : November 11, 2015, 17:45 Hrs to 18:45 Hrs.

MARKET TREND FOR WEDNESDAY, NOVEMBER 11, 2015

Markets shall conduct a small “Muhurat” trading session from 17:45 hrs to 18:45 Hrs and such sessions remain typically symbolic in nature. We may expect a flat opening and also see the Markets trading in a subdued and capped range for a one hour long session today. The Markets are now “oversold” and we may see some positive ticks today. However, no major movements are expected in today’s session.

The levels of 7810 and 7840 are immediate resistance levels for the Markets. The supports come in at 7760 and 7710 levels.

The RSI—Relative Strength Index on the Daily Chart is 28.7980 and it has reached its lowest value in last 14-days which is bearish. It is now trading in “oversold” territory and it also does not show any bullish or bearish divergence. The Daily MACD remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY November futures have shed 1.95 lakh shares or 1.09% in Open Interest. Given these figures, it is evident that unwinding of positions continued.

Coming to pattern analysis, the Markets have closed near the lowest point of the day. Given this fact, speaking purely on technical terms, Markets may see some weakness persisting for some more time. At the same time, given the oversold nature of the Markets, some positive ticks cannot be ruled out. Due to fragmented week, with today just being a one-hour session followed by holiday tomorrow, and just one working day before a weekend, the volumes are likely to remain typically lower.

Overall, given this fact, we may see subdued, range bound Market session for today. Volumes are set to be lower and may not see the Markets heading decisively in either direction. Given the oversold nature of the Markets, some technical rebound in near term can be expected. Selective and moderate purchases may be made for today while maintaining a cautious outlook for the Markets.

Tuesday, November 10, 2015

Daily Market Trend Guide -- Tuesday, November 10, 2015

MARKET REPORT November 10, 2015

While trading precisely as analyzed, the Markets survived the Bihar scare as it ended with just modest losses after a serious gap down opening. The Markets saw more than 150-odd point’s gap down opening as the sentiment took a serious drawdown following thrashing of the NDA in Bihar polls. However, post such gap down opening, the Markets formed its intraday low of 7771.70 in the very early minutes of the trade. Soon after this, the Markets spent nearly entire session recovering from the lows. The Markets recovered somewhat in the morning trade itself and then traded sideways in the afternoon. Some more recovery came in the second half and at one point of time the Markets managed to recover most of its losses. It formed its intraday high point of 7937.75 while recovering nearly 160 points from its lowest point. It finally settled the day at 7915.20, posting a modest loss of 39.10 points or 0.49% while forming a lower top and sharply lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, NOVEMBER 10, 2015

The Markets today are likely to continue to feel some aftershocks and that would keep the analysis more or less on similar lines that of yesterday. The Markets are likely to open once again on a lower note but not like yesterday. Though a negative opening is expected, it is once again likely that the Markets sees some recovery or stability going ahead in the session given the overall structure on the technical charts as well as some F&O data. However, some choppiness is likely to remain ingrained in the Markets and volumes will tend to remain on lower side as well.

For today, the levels of 7950 and 7990 will act as immediate resistance for the Markets. The supports come in at 7850 and 7775 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.5881 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY November futures have shed over7.39 lakh shares or 3.96% in Open Interest. This very clearly indicates that shorts were covered on a large scale pose gap down opening yesterday. The NIFTY PCR stands lowest in recent times at 0.77 as against 0.83 yesterday.

Coming to pattern analysis, the Markets have made a severe and sharp breach of the pattern support in the form of rising trend line as evident from the Daily Chart. This level, on its way up, will continue to act as a short term resistance. Today, though some lower opening is expected, it continues to pose some chances just like yesterday for the Markets to recover as it goes ahead in the session. The F&O data suggests massive short covering yesterday and it suggests somewhat clear discomfort of the shorts at lower levels in the Markets. Even if the Markets sees fresh shorts getting built up and sees some downward pressure, such downsides seem to be limited as such.

Overall, the Markets may see somewhat lower opening today as well but it is advised to now refrain from creating any fresh shorts. Given the overall structure and the F&O data, the downsides seem limited and any dips should be continued to be used for making quality and selective purchases. However, in the same breadth, such exposures should be kept at very moderate levels and high vigil over profits at higher levels should be maintained.

Monday, November 9, 2015

Daily Market Trend Guide -- Monday, November 09, 2015

MARKET REPORT November 09, 2015

The Markets ended virtually unchanged after a positive opening and oscillating in a very narrow range for the entire session while the caution continued to weigh high on the Markets. The Markets saw a positive opening but as it has been doing it in the past, it formed its intraday high of 8002.65 in the early hours of the trade. However, as expected, the Markets did not capitalize on this positive opening and soon pared all of its gains in the morning trade. It came off its highs and even dipped into the negative territory. The Markets headed literally nowhere as it then continued to oscillate in a completely direction less manner. The Markets spent rest of the session trading in such narrow range. However, the late trade saw the Markets forming the day’s low of 7926.15. Again, some recovery was seen and the Markets settled the day at 7954.30, posting a negligible loss of 1.15 points or 0.01% while continuing to form a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 09, 2015

Markets will have a sentimental drawdown to Bihar Results and are expected to open on a gap down note, probably near its support zone of 7800-7850 levels. However, the Markets have already corrected nearly 400-odd points from 8350 to 7950 levels and therefore we can expect that there can be some amount of recovery post opening, especially in the second half. The reason of this hope of recovery in the later part is that the Markets had already expected and digested such outcome to some extent.

For today, the levels of 7975 and 8020 are immediate resistance for the Markets. The supports exists at 7880 and 7840 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.0591 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it continues to trade below its signal line. On the Weekly Charts, the Weekly RSI is 43.7442 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Weekly MACD has reported a negative crossover and it now trades below its signal line.

On the derivative front, the NIFTY November Futures have shed over 4.01 lakh shares or 2.10% in Open Interest. There are very clear indications that good amount of short positions exist in the Markets. The NIFTY PCR stands at 0.83 as against 0.86 levels on Friday.

Coming to pattern analysis, the today’s gap down opening will cause the Markets to breach one more of its pattern support levels, this time in the form of a rising trend line. However, it is important to note that the Markets have already seen the decline of over 400-odd points over last fortnight and today’s opening is most likely to see the shorts positions being covered from lower levels. The short covering and recovery from lower level is likely but the timing of the same remains highly uncertain. However, probability remains that the Markets show resilience post lower opening and some short covering may lead the Markets to recover in the later part of the day.

Given this picture and analysis, the Markets do have some amount of hopes of recovering in the later part of the day. However, the undertone has certainly turned bearish following the Bihar outcome and also the probability of still impending rate hike from the Fed. Overall, even if there are chances that the initial dip may be bought into, we continue to advise to remain clear of the Markets and avoid any significant exposure at buying. Limited purchases at lower levels with great degree of caution is advised for today.

Gemstone Equity Research & Advisory Services