Friday, May 27, 2016

Daily Market Trend Guide -- Friday, May 27, 2016

MARKET TREND FOR FRIDAY, MAY 27, 2016
The Markets had a breakout yesterday and a day of yet another robust gain as it ended on a high note yesterday. Today, we can once again expect the Markets to open on a modestly positive note and look for directions. It is important to note that the Markets have gained over 320-odd points in two sessions and therefore some consolidation at higher levels cannot be ruled out. In fact, such consolidation is likely to be healthy in the long run.

For today, the levels of 8095 and 8165 will act as immediate resistance levels for the Markets. The supports come in lower at 7950 and 7910 levels.

The RSI—Relative Strength Index on the Daily Chart is 65.65.7510 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence on the Charts. The Daily MACD has reported a bullish crossover and is now bullish as it trades above its signal line.

On the derivative front, the NIFTY June series have added over 46.01 lakh shares or 30.90% in total Open Interest.

Coming to pattern analysis, the Markets have given a breakout after consolidating in a triangle for nearly a month. After resisting at its 200-DMA for couple of times and after oscillating with a support at its 50-DMA the Markets have broken out on the upside yesterday. Having said this, the technical structure and the lead indicators suggest likelihood of continuation of momentum on the Daily Charts. However, given the fact that the Markets have gained over 320-odd points in two straight sessions some amount of consolidation still cannot be ruled out. Speaking purely on technical grounds logical target of 8200 levels cannot be ruled out with lower band support of 7910.

Overall, momentum is likely to continue but at the same time some amount of consolidation cannot be ruled out. It is advised to completely avoid shorts at any nature continue to make selective purchases. Out performance from leading sectors will be seen as they are likely to support the overall momentum of the Markets. Positive outlook is advised for today.


Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
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Thursday, May 26, 2016

Daily Market Trend Guide -- Thursday, May 26, 2016

MARKET TREND FOR THURSDAY, MAY 26, 2016
Yesterday’s strong up move has thoroughly altered the short term structure of the Daily Charts. The Markets have now moved well beyond its 200-DMA and has further inched near its resistance zones of 7970-7990 levels. Today, we will again see some modestly positive opening and will see if the Markets achieve an breakout on the upside. The Markets will also remain heavily dominated with rollovers as today is the expiry of current derivative series.

The levels of 7990 and 8035 will act as immediate resistance levels for today. The supports come in much lower at 7910 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.4248 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 still bearish as it trades below its signal line.

On the derivative front, the NIFTY May futures have shed over 21.61 lakh shares or 15.81% in Open Interest. The June futures added over 62.30 lakh shares or 71.99% in Open Interest.

Coming to pattern analysis, with the yesterday’s strong up move, the overall structure of the Daily Charts have altered a bit. The Markets still continue to remain in a triangle formation but its range is widened and also because of that, it trades exactly around 3/4th of its apex. Having said this, it has also moved past its 200-DMA yesterday and now trades around its pattern resistance. Any higher opening today will result into an attempted breakout for the Markets on the up side if they open positive and manage to sustain above that.

Overall, the Markets rest at interesting juncture. Speaking purely on technical lines, the Markets are likely to see a modestly positive opening and if it capitalizes on this, it may achieve a possible breakout on the upside. However, the opening levels and some advancement will take the Markets around its resistance zones of 7970-7990 levels and it would be critically important to see how the Markets deals with these levels. While continuing to avoid shorts even at higher levels, selective purchases may be made.


Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
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Wednesday, May 25, 2016

Daily Market Trend Guide -- Wednesday, May 25, 2016

MARKET TREND FOR WEDNESDAY, MAY 25, 2016
The Markets took support on 50-DMA couple of times yesterday and after oscillating in a tight range ended the day with modest gains. The Markets have successfully kept its head above 50-DMA and today we are likely to see a gap-up opening in the Markets. There are bright chances that the Markets see a decently positive opening and look for directions. The likely opening levels will see the Markets opening around its 200-DMA which stands at 7792 today and the behavior of the Markets vis-à-vis this level would be critical to watch out for.

For today, the levels of 7792 and 7845 will act as immediate resistance levels for the Markets. The supports come in at 7715 and 7680 levels.

The RSI—Relative Strength Index on the Daily Chart is 46.8539 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD stays bearish as it trades below its signal line.

On the derivative front, the NIFTY May futures have shed over 9.52 lakh shares or 6.52% and June series added over 21.81 lakh shares or 33.70% in Open Interest resulting in net addition of OI. The NIFTY PCR stands at 0.86 as against 0.83 yesterday.

Coming to pattern analysis, the Markets have been in very tight trading range and have been oscillating in between its DMAs for couple of days of time now. After remaining briefly in symmetrical triangle formation for couple of days and while resisting to its 200-DMA, the Markets gave a mild downside breach. However, it has managed to keep its head above 50-DMA which stands at 7736, is likely to see a strong gap up opening today. However, it becomes extremely important to note that the likely gap up opening will see the Markets opening around its 200-DMA. Even if the Markets moves past 200-DMA and manages to inch upwards 7835-7850 range, it will be still within the pattern resistance levels.

Overall, it would be critically important to see if the Markets are able to build up further on the expected positive opening. For a fresh breakout to occur on the upside, the Markets not only will have to move past the 200-DMA but will have to move past the resistance zones of 7840-7850 as well. Until this happens, it will continue to oscillate in the same tight range heading now where with good amount of volatility ingrained in it.  Emphasis should be continued to be laid on protecting profits at higher levels until the mentioned levels are breached on the upside.

Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331


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Tuesday, May 24, 2016

Daily Market Trend Guide -- Tuesday, May 24, 2016

MARKET TREND FOR TUESDAY, MAY 24, 2016
The Markets witnessed terrible amount of volatility yesterday as it swung 200-points both sides in total before ended the day with modest losses. Today, we can expect the Markets to see a quiet opening again but the analysis will continue to remain on similar lines. The Markets have been taking support on its 50-DMA which stands at 7730 today since last 2-3 days and this level will be critical to watch out for. Any significant slippage below this level can induce some more weakness in the Markets.


For today, the levels of 7765 and 7810 will act as immediate resistance levels for the Markets. The supports come in at 7710 and 7650 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.35 and it does not show any failure swing. The NIFTY has formed a fresh 14-day low but RSI has not and this is Bullish Divergence. The Daily MACD stays bearish as it trades below its signal line.

On the derivative front, rollovers continued as the NIFTY May futures shed over 10.05 lakh shares or 6.44% in Open Interest while June futures added over 28.21 lakh shares or 77.25% in Open Interest. The NIFTY PCR stands at 0.83 as against 0.86.

Coming to pattern analysis, as mentioned often in our previous edition, the Markets have given a downside breach from a symmetrical triangle formation on the Daily Charts. While doing so, it took support at its 200-DMA couple of times and after this breach, this very same level of 200-DMA which stands at 7795 will act as resistance for the Markets. However, the 50-DMA, which is 7730 has been acting as support since two days and this level would be critical to watch out for. If the Markets breach this level, we will see some more weakness in the Markets in the immediate short term. However, there has been no structural breach on the Daily Charts and this remains a normal correction. The RSI has stayed within its formation and has not formed a fresh low indicating some resistance to major downsides.

Overall, it is important to note that the Markets have done nothing that warrants a structural breakdown. However, we will continue to see some more corrective activities and unless the Markets moves back above its 200-DMA all up moves should be utilized to protect existing profits. While avoiding shorts and keeping fresh purchases at moderate levels cautious outlook is advised on the Markets.


Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
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Monday, May 23, 2016

Daily Market Trend Guide -- Monday, May 23, 2016

MARKET TREND FOR MONDAY, MAY 23, 2016
Markets had a weak session on Friday and it continued to weaken as it tested its 50-DMA levels while ending with losses. Today, we can see a mild uptick on the Markets and may see some temporary respite from the downside. Today, we can expect a fairly modest and positive opening to the Markets. However, the intraday trajectory that the Markets form would be important to watch out for and so long as it trades below 200-DMA, the levels of 50-DMA will be critical support for the Markets.


For today, the levels of 7800 and 7835 will be immediate resistance levels for the Markets. The supports come in at 7725 and then at 7640 levels.

The RSI—Relative Strength Index on the Daily Chart is 46.63 and it does not show any failure swings. The RSI has not formed a fresh 14-day low while NIFTY has formed and this show Bullish Divergence. The Daily MACD is bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY May futures have shed over 8.73 lakh shares or 5.29% in Open Interest. This indicates unwinding of positions continued in the Markets.

Coming to pattern analysis, after resisting couple of times in the zones of 7970-7990 levels, the Markets took support at its 200-DMA many times and while doing this, it formed a symmetrical triangle on the Daily Charts. It saw a downside breakout and has gone on to test its 50-DMA which is 7725 today. Therefore, the level of 200-DMA which stands as 7798 continue to act as resistance in the immediate short term while the level of 50-DMA, i.e. 7725 will act as immediate support. Any breach below this level will see some more weakness creeping into the Markets. The RSI has not formed a lower low and some amount of moderate pullback cannot be ruled out.

Overall, even if a modest pullback is seen, so long as the Markets trades below its 200-DMA, it will remain vulnerable to the selling pressure from higher levels. Further, with the current week being expiry week, some amount of volatility will continue to remain ingrained in the Markets. While continuing to keep overall exposure in the Markets moderate, cautious outlook is advised for the day.


Milan Vaishnav,
Consulting Technical Analyst

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

+91-98250-16331
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