Friday, March 4, 2016

Daily Market Trend Guide -- Friday, March 04, 2016

MARKET REPORT                                                                                              March 4, 2016
Markets continued to defy gravity yesterday as well as it continued to end yet another day with decent gains. The Markets saw a decently positive opening aided by favorable technical indicators and global cues. After opening on a positive note the Markets remained in upward rising trajectory for the entire session. After a brief sideways trade in the morning, the Markets kept forming gradual intraday highs. Every minor selloff got absorbed by fresh buying and at no point of time did the Markets showed any weakness or any intent of profit taking. It went on to move past its 50-DMA as well while it formed its day’s high of 7483.95. These levels were maintained and the Markets finally settled the day at 7475.60, posting a decent gain of 106.75 points or 1.45% while forming yet another sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, MARCH 04, 2016
Today’s analysis continue to remain more or less on similar lines as the Markets are likely to open on a positive note and trade with gains at least in the initial trade. The Markets have closed a notch above its 50-DMA and today’s opening would take it further higher. The NIFTY has gained nearly 10% after Budget Day’s low this up move has got largely to the very sharp arbitrage buying by the FIIs. This strength is likely to continue today as well at least in the initial trade as the Markets approaches yet another major resistance level.

For today, the levels of 7510 and 7550 will act as important resistance levels for today. The supports come in at 7425 and 7380.

The RSI—Relative Strength Index on the Daily Chart is 59.2253 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD stands bullish as it trades above its signal line. On the Candles, yet another rising window occurred. This implies continuation of the bullish trend in the Markets.

On the derivative front, the NIFTY March futures had added yet another 13.76 lakh shares or 6.90% in Open Interest. This indicates addition of fresh long positions in the Markets.

While having a look at pattern analysis, the Markets have not only moved past 7240 a day before, but have also went on to move past its 50-DMA which is 7428 today. Today, with likely positive opening, the Markets are likely to build some more gains in the initial trade and in event of any mild profit taking or consolidation, the levels of 7428 is very much expected to act as support. On the other side, if the Markets continue with its advance, it will approach one of its major resistance zone of 7550-7575. This will remain major resistance zone as this is the triple bottom of the wide Descending Triangle that the Markets breached on the downside. It would be healthy if the Markets witnesses some consolidation at these levels as unabated rise can get little unhealthy especially when the Markets ignores important resistance zones.

All and all, even though all indicators continue to point towards continuing bullish environment in the Markets, some amount of consolidation or profit taking from higher levels cannot be ruled out. We have an extended weekend this time with Monday being a trading holiday. Any downticks will help Markets further attempted to confirm a bottom and reverse its trend. However, until happens, it is now time to exercise caution and lay emphasis on guarding and protecting 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, March 3, 2016

Daily Market Trend Guide -- Thursday, March 03, 2016

MARKET REPORT                                                                                  March 03, 2016
Markets staged yet another solid up move quite on expected lines as it opened strong, got stronger and ended yet another day with robust gains. The Markets saw a gap up opening once again. It saw itself opening with a decent gap up tracking very positive global cues and traded in a range in the early morning trade. Thereafter, it got stronger and traded nearly entire session in sideways trajectory. At no point did the Markets see any kind of profit taking or any weakness creeping. It maintained robust gains and towards the end went on to form a day’s high of 7380.35. While maintaining these levels, it finally settled the day at 7368.85 posting a robust gain of 146.55 points or 2.03% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, MARCH 03, 2016
Today can be a day of possible consolidation for the Markets. The Markets may once again see a positive opening but today, it would be crucial to see if the Markets furthers its gains of consolidate at bit at higher levels. Today’s expected up move can take the Markets at 50-DMA levels and it is very much likely that it consolidate and sees minor profit taking at those higher levels. Minor amount of range bound consolidation cannot be ruled out.

For today, the levels of 7395 and 7435 are likely to act as immediate resistance levels for today. The supports come in at 7308 and 7275 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.4977 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it trades above its signal line.

On the derivative front, the NIFTY March futures have added over 13.67 lakh shares or 7.36% in Open Interest. This very clearly indicates high addition in fresh long positions in the Markets.

Coming to pattern analysis, the Markets have given a break out above 7240 levels yesterday. The levels acted as a resistance a day before the Markets have given a upward breakout by opening above it yesterday and maintaining itself above that level. Today, with the likelihood of the Markets getting a positive opening, it is likely to advance its gains  at least in the initial trade.  With this the logical resistance that the Markets can face now is the 50-DMA which is 7434 today. There are chances that we see both – advancement from these levels; and also the Markets resisting at higher levels near its 50-DMA. In event of any consolidation of profit taking, the level of 7240 is now expected to act as support.

All and all, the Markets are likely to get a positive opening and it is likely to advance in the initial trade. However, at the same time, some amount of consolidation cannot be ruled out at higher levels. It is advised that though modest buying can still be continued, more emphasis should be laid on guarding and protecting profits at higher levels as chances of some consolidation cannot be ruled out. Overall, positive caution 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

+91-98250-16331

Wednesday, March 2, 2016

Daily Market Trend Guide -- Wednesday, March 02, 2016

MARKET REPORT                                                                                    March 02, 2016
Markets staged a huge short-covering led up move and went on to test its original resistance zone of 7220-7240 levels while it ended the day with strong gains. The Markets opened on a modestly positive note but it soon gathered strength. It went on to form gradual intraday highs throughout the session. The strength was evident as the Markets did not gave up any of its gains even once. It remained in upward rising trajectory for the entire day there was not even once that they showed any signs of any weakness or profit taking. Towards the end, it went on to test its critical resistance levels as it formed its intraday high of 7235.50. After hovering around those levels for a while, it finally ended the day at 7222.30, posting a net gain of 235.25 points or 3.37% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 02, 2016
Markets displayed massive strength in a short covering led rally that it witnessed yesterday. Having said this, speaking purely on technical grounds, the Markets should open higher and continue with its up move with the next logical resistance coming in at 50-DMA. Today, given the favorable global set up, it is very much likely that the Markets may see a strong 
opening and technical indicators indicate continuation of the up move.

For today, the levels of 7310 and 7345 are immediate resistance on the Daily Charts. The supports come in at 7240 (in case of gap up opening) and then at 7175 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.6273 and it has reached its highest value in last 14-days which is bullish. Also, RSI has formed a fresh 14-day high but NIFTY has not and this is Bullish Divergence. The MACD has once again reported a positive crossover and it now trades above its signal line.

On the derivative front, the NIFTY futures have gone on to shed some amount of Open Interest. This signifies short covering of open positions. It would be important to see if the Markets see these being replaced by fresh long positions.

Coming to pattern analysis, though the Markets have shown a strong up move, it resisted at the important level of 7240. This is the levels that the Markets breached on the downside on its way down. So, this is the level which is now acting as resistance on the way up. If we get a positive and stronger opening on the expected line and if the Markets consolidate at higher levels, this level should once again act as support. In any case, it would important for the Markets to trade above 7240 in order to capitalize on expected positive opening.

All and all, with the Markets likely to open on a stronger note, it is very much likely that it continues to build further on this. Also, in case of continued up move, it can test its next logical resistance at the 50-DMA levels of 7443. In event of continued up surge, any profits should be strongly guarded at such higher levels. Overall, 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

+91-98250-16331

Tuesday, March 1, 2016

Daily Market Trend Guide -- Tuesday, March 01, 2016

MARKET REPORT                                                                               March 1, 2016
The Markets faced the Union Budget on an extremely volatile note as it swung over 200-odd points either side and after such wild swings of 400-odd points ended the day with modest losses. The Markets opened on a modestly positive note and as expected, it saw a sideways movement in a narrow trajectory in the morning session. However, once the Budget proposals started to pour in, the Markets did not take them kindly and saw a near vertical fall after initial reaction. It went on to form the fresh 52-week low of 6825.80 by afternoon. However, it did also witness a nearly V-shaped recovery as well. The Markets sharply recovered from its lows and recovered all of its gains and also traded back into positive while forming day’s high of 7094.60. After swinging nearly 400-odd points it finally settled the day at 6987.05, posting a net loss of 42.70 points of 0.61% while forming a higher top but sharply lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 01, 2016
Though the Markets posted its fresh 52-week lows yesterday, it has maintained the double bottom support of 6970 levels at Close. Today, we can fairly expect a modestly positive opening to the Markets. We can also expect some more short covering to continue. It would be important for the Markets to maintain the expected opening gains and maintain itself above 6950 levels in order to avoid any weakness.

For today, the levels of 7050 and 7195 will act as immediate resistance levels for today. The supports come in at 6950 and 6860 levels.

The RSI—Relative Strength Index on the Daily Chart is 37.2984 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line.

On the derivative front, the NIFTY March series have shed over 4.49 lakh shares or 2.43% in Open Interest. It signifies that there was massive short covering from lower levels that was seen yesterday.

Coming to pattern analysis, the Markets breached its previous 52-week low of 6869 while it formed a fresh 52-week low of 6825. However, as it recovered from its lows, the support in form of minor Double Bottom at 6970 was held and maintained at Close. Though the Markets may continue to witness good amount of volatility in coming session, it would be important and critical for the Markets to maintain levels above 6750 at Close levels in order to avoid any fresh weakness from creeping in. The Market will continue to witness intraday volatility and the levels of 6825 will act as intraday support as well. However, as of now the Markets continue to remain in its broad range of 6900-7250.

All and all, the Markets are clearly not out of the woods and it will continue to witness some reactive volatility as well. Global headwinds are likely to contribute to the technical structure as well. Having said that, so long as Markets maintain levels above 6850 levels, selective purchases in moderate quantities may be made. Shorts, at these times, should be avoided. While guarding existing positions at higher levels, cautious outlook should be continued for today.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331



Monday, February 29, 2016

Daily Market Trend Guide -- Monday, February 29, 2016

MARKET REPORT                                                                                February 29, 2016
The Markets ended the day with modest gains after it moved up following the Economic Survey that was tabled in the Parliament today. The Markets saw a nearly gap up opening and formed its intraday high of 7052.90 in the early minutes of the trade. The morning session and the first half of the day saw the Markets slowing paring its opening gains. At one point in the first half of the session, the Markets pared majority of the opening gains to trade flat. The second half, though, saw some positive reactions from the Markets following the Economic Survey. The Markets saw some strength returning again and at one point of time, went near to its opening highs as it recovered again. It finally ended the day at 7029.75, posting a net gain of 59.15 points or 0.85% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR MONDAY, FEBRUARY 29, 2016
The Markets managed to maintain the minor double bottom support levels at Close and ended the day on Friday with modest gains and remained in a broad trading channel. Today, the Markets brace itself to fact major external event, the Union Budget. Today’s opening is most likely to be on quiet to modestly negative note and it is expected to trade in a capped range until the Budget proposals start pouring in. The levels of 6970 at Close would be important to watch out for.

The levels of 7085 and 7120 are likely to act as immediate resistance levels for today. The supports come in at 6970 and 6860 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.9032 and it stays neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 34.8494 and this too is neutral as it shows no bullish or bearish divergence or any failure swings. The Weekly MACD is Bearish as it trades below its signal line but it trades in “oversold” territory.

On the derivative front, the NIFTY March futures have shed over 1.62 lakh shares or 0.87% in Open Interest. Though the reduction in OI is not too large, but we can certainly see that the rise that we saw on Monday has got to do somewhat with short covering.

Coming to pattern analysis, the Markets have maintained and held on to its double bottom support at Close levels. Also, it now trades back into the broad trading range of 6900-7240 levels, though it trades more towards the bottom of the said range. It also becomes important to note that the Markets have major support in form of 200-Week DMA levels which coincides with the recent 52-week lows. Having said this, in the same breath, the levels of 6970 too would be important to watch out for at Close levels today. Given the pattern analysis, and the overall technical structure of the Charts, we can fairly conclude that if the Markets breach the levels of 6970 at Close, we will certainly see some more weakness but at the same time, it will counter one of the major support at current 52-week lows.

All and all, today’s session will certainly be a choppy affair and some amount of volatility will remain ingrained in the session today. However, looking purely at technical structure, if the Markets react negatively to the Budget proposals, major downside beyond the current 52-week lows look limited. It is advised to continue to remain light on overall exposures until the directional bias is established.

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