Friday, January 22, 2016

Daily Market Trend Guide -- Friday, January 22, 2016

MARKET REPORT                                                                                      January 22, 2016
Markets failed to capitalize on a buoyant opening and lost ground during the day and ended yet another day with modest losses. The Markets saw a positive opening and after opening on a positive not strengthened further to form the day’s high of 7398.70. However, this remained for a brief time and the markets soon transformed itself into falling trajectory. It gradually kept losing ground and at one point in the afternoon trade, it traded near its previous close after paring all of its opening gains. It slipped further into the red and in the second half of the session formed the day’s low at 7250, coming off nearly 150-odd points from the high point of the day. It attempted recovery and at one point also recovered its losses to trade briefly into the green. However, post some more slippage, it finally settled the day at 7276.80, posting a net loss of 32.50 points or 0.44% while forming a lower top but slightly higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JANUARY 22, 2016
Today’s analysis continues to remain on similar lines that of yesterday. We can expect a fairly positive start to the Markets but just like yesterday, it would be critically important to see if the Markets are able to capitalize on expected positive opening and build up further gains on that. The lead indicators of the Markets are in “oversold” territory and this likely to aid the Markets give a sustainable pullback.

For today, the levels of 7325 and 7390 are likely to act as immediate resistance levels for the Markets. The supports exist at 7250 and 7175 levels.

The RSI—Relative Strength Index on the Daily Chart is 29.3675 and it trades in “oversold” territory. It does not show any failure swing but the NIFTY has made a fresh 14-day low while the RSI has not and this is Bullish Divergence. The Daily MACD is bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY January futures have shed over 12.52 lakh shares or 6.02% in Open Interest. The NIFTY PCR stands at 0.82 as against 0.83 levels.

While having a look at pattern analysis, the Markets have got oversold after it lost ground once its breached its critical pattern support of 7540. As mentioned often in our previous editions, the Markets will face stiff resistance at 7540 levels as and when it pulls back. Having said this, the Markets have been oscillating with a continuing negative bias in 150-odd points range and currently stand oversold. There are chances of a technical pullback today and the oversold nature of the Markets is likely to aid the same. However, at the same time, it becomes important to note that there is been no respite in massive put buying activity which throws little negative light on the attempts of the Markets to find a bottom and if not this, then it would certainly put a question mark on the sustainability of any technical pullbacks.

Overall, it is evident that though the Markets now currently stands “oversold”, they are not completely out of the woods as yet. Though it has been vigorously trying to find a immediate short term bottom, it has not done so as of now. In light of such technical condition of the Markets, we continue to reiterate our stand of keeping the purchases to restricted quantity and continue to protect profits at higher levels.


Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331

Thursday, January 21, 2016

Daily Market Trend Guide -- Thursday, January 21, 2016

MARKET REPORT                                                                                      January 21, 2016
The Markets once again had a thoroughly bearish session as it posted its fresh 52-week lows and ended yet another day with losses after recovering a bit from the low point of the day. The Markets saw a gap-down opening following global weakness and it traded in a sideways trajectory for the first half of the session while showing no signs of recovery. In the second half, the weakness intensified as the Markets breached the psychological levels of 7300 to form the day’s low at 7241.50. However, in the final hour of the trade, the Markets came off its lows and attempted to recover. It did recover some 60-odd points from the low point of the day. The Markets finally settled the day at 7309.30, posting a net loss of 125.80 points or 1.69% while forming slightly higher top but sharply lower bottom on the Daily Bar Charts.


MARKET TREND FOR Thursday, January 21, 2016
Markets pulled back some 60-odd points from the low point of the day yesterday. Technically speaking, we can expect the Markets continue with its up move today as well. Keeping line with this analysis, the Markets are expected to open on a decently positive note and look for directions in initial trade. It would be critically important to see if the Markets are able to capitalize on its up move and build further gains.

For today, the levels of 7375 and 7420 will act as immediate resistance levels for the Markets. The supports come in at 7240 and 7175 levels.

The RSI—Relative Strength Index on the Daily Chart is 30.4766 and it is once again very near to being “oversold”. The NIFTY has made fresh 14-days lows but RSI has not and this is Bullish Divergence. It does not show any bullish or bearish divergence. The Daily MACD is bearish as it trades below its signal line.

On the derivative front, the NIFTY January futures have shed just 15,525 shares or negligible 0.07% in Open Interest. NIFTY PCR stands at 0.83 as against 0.82 yesterday.

While having a look at pattern analysis, the Markets hare off nearly 250-odd points after breaching the critical support levels of 7540. In the process the Markets have got oversold as well and are now attempting pullback. With the lead indicators remaining nearly oversold once again, any downtick with take the Markets to being oversold once again. This makes a pullback imminent. It would be also important to note that there has been an increase in PCR and this shows that despite fall in the Markets, there has been massive buying of puts that is going on. On the other hand, it also becomes important to note that the NIFT VIX have peaked little above September 2015 levels. This shows some hopes of the Markets bottoming out.

All and all, what we see on the Charts is that the Markets are attempting to find a short term base and are attempting to pullback. It becomes all the more important to note that even if the Markets see technical pullback, the levels of 7540 going ahead will be a major resistance to watch out for. The Markets are likely to see technical pullback but that should not be constituted as a trend reversal. While continuing to buy on selective basis, shorts should be avoided while adopting positive caution 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, January 20, 2016

Daily Market Trend Guide -- Wednesday, January 20, 2016

MARKET REPORT                                                                                       January 20, 2016
The Markets finally saw a relief rally today as it opened on a positive note and strengthened during the day to end with gains. The Markets saw a modestly positive opening and after trading in capped gains in the early morning trade, the Markets transformed themselves into upward rising trajectory. The Markets spent most past of the session remaining in upward rising channel while gradually forming fresh intraday highs. It was in the second half that the Markets formed its day’s high of 7462.75. Thereafter, the Markets continued to trade sideways in the last hour and half. It did come off a bit from the high point of the day and finally settled the day at 7435.10, posting a net gain of 84.10 points or 1.14% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR Wednesday, January 20, 2016
The Markets saw a much awaited technical pullback yesterday but it is important to observe that the rise that we saw yesterday was more on back of short covering than any fresh long positions as the Markets rose while shedding Open Interests across board. Today, we can once again expect a negative opening and it would be important to see if the Markets improve post opening. There are chances that Markets attempts to find base post modestly negative opening.

For today, the levels of 7475 and 7510 will act as immediate resistance levels for today. The supports come in at 7370 and 7320 levels.

The RSI—Relative Strength Index on the Daily Chart is 35.2631. It has just moved above from its “oversold” area which is bullish. It further remains neutral without showing any bullish or bearish divergence or any failure swings. The daily MACD remains bullish as it trades below its signal line.

On the derivative front, the  NIFTY January series have shed over 4.33 lakh shares or 2.04% in open interest. This clearly shows the rise that we got yesterday was more on back of short covering than any fresh buying.

Coming to pattern analysis, as mentioned often in our previous editions of Daily Market Trend Guide, the Markets have decisively breached its triple bottom support of 7540 levels during its downside in the previous sessions. It went on shed further over 200-odd points and while doing so it got oversold and yesterday, it showed technical pullback from the fresh 52-week lows. Having said this, it becomes important to mention again that the critical support levels of 7540 that the Markets breached on the downside will continue to pose major resistance to the Markets while it tries to find a bottom and reverse itself.

All and all, the Markets are attempting to find a base and after today’s expected lower opening, there are possibilities that the Markets shows some improvement as we go ahead in the lesion. Looking at the lead indicators, we advise to refrain from creating any short positions as the possibilities of short traps remain with every downtick. At the same time, it is also advised to continue to keep purchases and overall exposures at moderate levels while maintaining cautious optimism 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

Tuesday, January 19, 2016

Daily Market Trend Guide -- Tuesday, January 19, 2016

MARKET REPORT                                                                                         January 19, 2016
Markets remained thoroughly bearish and went on to post fresh 52-week lows while it ended yet another day with losses. The Markets saw a stable opening on expected lines and traded briefly into positive territory while it formed its intraday high of 7463.65. However, after trading briefly into positive in much capped range, the Markets slipped into the red. However, it continued to trade once again in sideways trajectory for most part of the afternoon trade. It headed nowhere until second half of the session. However, the second half saw some weakness creeping in again and that too in intensified manner. The Markets rapidly lost ground and slipped to form the day’s low of 7336.40, coming off nearly 130-odd points from the high point of the day. It finally settled the day at 7351, posting a net loss of 86.80 points or 1.17% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, JANUARY 19, 2016
Broader markets are now cleanly oversold and we can now expect some stability to return in the Markets.  The Markets are expected to open on a flat to mildly positive note and look for directions. It is expected and it is equally important that the Markets maintains and builds up on its expected mildly positive opening. NIFTY and other broader and sectoral indices are now seriously oversold and irrespective of the quantum, some amount of technical pullback remains imminent.

For today, the levels of 7415 and 7475 are immediate resistance levels for the Markets. The supports come in at 7330 and 7275 levels.

The RSI—Relative Strength Index on the Daily Chart is 28.2698 and it has reached its lowest levels in last 14-days which is bearish. However, it does not show any bullish or bearish divergence and it now trades in “oversold” territory. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY January futures have shed over 13.78 lakh shares or 6.09% in Open Interest. The NIFTY PCR stands at 0.80 as against 0.82.

While taking a look at pattern analysis, the Markets have breached its critical support levels of 7540 which were its previous 52-week lows and have since then remained weak on expected lines. Post breaching these levels, the Markets have lost over 200-odd points from those levels and now trades grossly “oversold”. The lead indicators clearly suggest themselves trading in oversold territory. Having said this, with the  NIFTY and other broader and secotoral indices trading in seriously oversold territory, some amount of pullback cannot be ruled out. In fact, some amount of technical pullback now remains imminent. However, on its way up, the significant levels like 7540 that the Markets have breached on the downside will pose resistance to it as well. Any amount of pullbacks that are seen now will remain “pullbacks” and will not amount to trend reversal in near term.

All and all, though the structure of the Markets remain evidently bearish in the immediate medium term, it is likely to show some stability and attempt some pullback. It is advised to completely refrain from creating fresh shorts. In fact with any weakness some very selective purchases can be made but at the same time profits at higher levels should be protected. Investors can now start creating long exposures in smaller quantities on highly selective basis.

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

Monday, January 18, 2016

Daily Market Trend Guide -- Monday, January 18, 2016

MARKET REPORT                                                                                      January 18, 2016
What seemed to be a listless and consolidating session for the Markets on Friday turned out to be an yet another disappointing one as the Markets ended yet another day with losses. The Markets saw a modestly positive opening and traded in a capped range with limited gains in the early morning trade. During this time, it formed its day’s high of 7556.50. However, after briefly trading in the green, the Markets gradually slipped into red. However, still, the Markets traded in sideways trajectory. It headed nowhere while trading in a very capped and narrow range. It was the late afternoon trade that saw sharp fall in the Markets once again. The Markets very rapidly lost ground and went on to form the day’s low of 7427.30, just a whisker away from its 52-week low. However, after very minor recovery, the Markets ended the day at 7437.80, posting a net loss of 99 points or 1.31% forming lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR MONDAY, JANUARY 18, 2016
Speaking purely on technical grounds, the Markets ended on Friday near their low point and therefore are likely to continue to see some downside in the initial trade today. However, today, though we can expect to see a modestly negative opening, we can also hope for some respite from the weakness that we saw in the previous week. Markets are nearly oversold and there are some faint chances that the Markets may attempt to find temporary bottom and stabilize.

For today, the levels of 7480 and 7540 will act as immediate resistance levels for the Markets. Supports come in at 7420 and 7365 levels.

The RSI—Relative Strength Index on the Daily Chart is 31.5345 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 stands bearish as it trades below its signal line. On the Candles, and Engulfing Bearish Pattern has occurred. If this occurs during a downtrend which appears to be the case with NIFTY, it indicates a bullish reversal. However, this needs confirmation today.  On the Weekly Charts, the Weekly RSI is 37.1995 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY January futures have added over 2.65 lakh shares or 1.19% in Open Interest. This shows further creation and addition of fresh shorts in the system. The NIFTY PCR stands at 0.82 as against 0.83 on Friday.

Coming to pattern analysis, the Markets have ended near the low point of the day on Friday and while doing so it has also breached its important pattern support levels of 7540. It is evident that on its way up, this level is all likely to pose resistance. There is no doubt that such close has made the Markets structurally weaker. However, at the same time, it is also important to note that lead indicators of the Markets are nearly “oversold” and any downtick at Close levels will make the Markets oversold .So, it becomes important to note that even if the Markets have got little structurally weaker, some amount of technical pullback remains imminent even if it continues to remain in overall downtrend.

All and all, it is also important to note that over half of NIFTY components are oversold. It is also important to note that nearly half of top BANKNIFTY components are oversold. This shows that some amount of pullback, either today or in coming days is now overdue. However, it should be noted that until the Markets are back above 7800, any rise will just remain a technical pullback and we will continue to remain in overall downtrend. It is advised to use all pullbacks to exit and protect profits while continuing to adopt 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