Daily Market Trend Guide -- Friday, December 02, 2016

MARKET TREND FOR FRIDAY, DECEMBER 02, 2016

Much on the expected lines, the NIFTY halted its pullback and consolidated in while ending the day with modest losses. The Markets remained stable in the first half but NIFTY saw declines mainly led by corrective movements in banks, auto and telecom stocks. Today, we expect a stable opening to the Markets but the range bound consolidation is likely to continue with the levels of 200-DMA which is 8165 acting as immediate support. Overall, as indicated by various evidences, the consolidation in the Markets is likely to remain in a capped range and the overall bias continues to remain positive.

For today, the levels of 8250 and 8325 will act as immediate resistance levels for the Markets. The supports come in at 8165 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 44.6703 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line. On the Candles, a black candle has occurred. This has no significance and it does not qualify to be a Dark Cloud Cover as the close of the current Candle is not below the midpoint between the opening and closing prices of the previous day.

On the derivative front, the NIFTY December futures have added yet another 5.01 lakh shares or 3.22% in Open Interest. This clearly shows some more addition of short positions in the system.

Coming to pattern analysis, the pullback that was seen in NIFTY since the lows of 7929 at Close levels has been expectedly halted as it has resisted to the previous support that it breached on the downside. It has halted at the return line (lower support line) of the falling channel that it has breached on the downside. It will need to move past the levels of 8225-8230 and stay above that to be back again to avoid any weakness once again in the short term.

Overall, the only spoilsport that the Markets may face is the US Bond yields not relenting and the Bonds continuing to show downward pressure despite oversold levels. This may cause the Markets to show some temporary weakness or a range bound consolidation which may be accompanied with volatility. Apart from this, if we individually examine the F&O Data, the evidences from the lead indicators and overall present structure, we feel that after some consolidation, the pullback may continue. We advice cautious optimism on the Markets and expect stock specific out-performance  to continue.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member: 

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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

Daily Market Trend Guide -- Thursday, December 01, 2016

MARKET TREND FOR THURSDAY, DECEMBER 01, 2016

After resisting to the200-DMA in the first half of the session, the NIFTY went on to move past it and ended the day with decent gains. As of present Close, the NIFTY has touched and ended a notch above the other pattern resistance of the return line (lower line of the falling Channel). However, in the process, the NIFTY has established and confirmed a near term bottom for itself and the levels of 200-DMA now should act as support in times of consolidation at higher levels. Today, we can fairly expect a stable start and expect the NIFTY to continue with its pullback at least in the initial trade.

For today, the levels of 8255 and 8310 will act as immediate resistance levels whereas the supports will come in at 8160 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 46.3382 and it has reached its highest value in last 14-days which is Bullish. Also, RSI has set a fresh 14-period high whereas NIFTY has not yet and this translates into Bullish Divergence. The Daily MACD is bullish as it trades above its signal line.

On the derivative front, the NIFTY December futures have added over 5.08 lakh shares or 3.37% in Open Interest. This clearly indicates addition of fresh longs in the system as the increase in NIFTY has resulted along with rise in Open Interest.

Coming to pattern analysis, the NIFTY has successfully pullback after establishing a immediate low of 7929 at Close. This level is likely to act as major support in future in event of any short term consolidation. Also, the NIFTY has managed to move past the 200-DMA which is 8161 and in event of any short term reactive downsides, this level should now act as Support. The NIFTY now currently tested the return line (lower support line of the falling channel) and has closed a notch above this. Overall, this reading, along with the F&O data and the lead indicators clearly indicates that apart from minor corrections and some consolidation, the bias remains on the positive side and the upticks are likely to continue.

All and all, though some amount of consolidation, like the one that happened in the first half of the previous session, the overall bias remains on the upside. Any short term reactive movements are likely to find support at 200-DMA while the levels of 7929 remains a short term bottom for the Markets. We continue to reiterate making purchases with each corrective movements and maintain a positive outlook on the Markets.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member: 

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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

Daily Market Trend Guide -- Wednesday, November 30, 2016

MARKET TREND FOR WEDNESDAY, NOVEMBER 30, 2016

NIFTY continued to resist to the 200-DMA at Close and continued to consolidate. It ended with minor gains but came off considerably from the high point of the day. Today, we keep our analysis on similar lines and the levels of 200-DMA which is 8157 and 8200 will be critical to watch for as these two are important pattern resistance levels that NIFTY will have to move past in order to have a sustainable pullback. The start today is once again likely to remain subdued and the mentioned levels will continue to act as immediate resistance for the Markets.

For today, the levels of 8155 and 8205 will act as immediate resistance levels for the Markets. The supports come in at 8105 and 8050 levels.

The RSI—Relative Strength Index on the Daily Chart is 41.0081 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD has reported a bullish crossover and it is now bullish as it trades above its signal line. We had mentioned about possibility of a bullish crossover of this lead indicator in our previous edition. There are multiple identification of Candles on the Daily Chart. An Inverted Hammer has occurred. This often signals reversal which requires confirmation on the following day. A larger observation, a Shooting Star has occurred. During an uptrend or a pullback, this often signals some slowdown and temporary weakness. However, this also requires confirmation on the next day.

On the derivative front, the NIFTY December series has added over 3.39 lakh shares or 2.30% in Open Interest. This shows some fresh shorts too have been added with the decline that we saw in the second half.

Coming to pattern analysis, it is very much evident that after breaking down from a falling Channel drawn from 8968 levels, the NIFTY went beyond its routine measuring implication and went on to breach the important support of 200-DMA. Speaking purely on technical terms, any support once broken becomes a resistance. Exactly on these lines, the levels of 200-DMA is acting as resistance at Close levels with NIFTY. It would be crucial for the NIFTY to move past this level and end above that so as to have a sustainable pullback.

Overall, the NIFTY is currently facing two important resistance levels at Close. One is 200-DMA and the other one around 8200-mark which is a pattern resistance in form of the return line (support line) of the Channel that the NIFTY breached on the downside. Until the NIFTY manages to move past these levels, we will continue to see the NIFTY consolidating in a broad range. We advice to refrain from creating major exposure and dips should be continued to make fresh purchase while thoroughly avoiding shorts. Overall, continuance of cautious outlook is advised for today.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member: 

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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

Daily Market Trend Guide -- Tuesday, November 29, 2016

MARKET TREND FOR TUESDAY, NOVEMBER 29, 2016

Though the Indian Equities recovered from its initial lows, it ended the day with modest gains while testing its 200-DMA intraday. Today, the analysis continues to remain more or less on similar lines. We might see subdued opening and the NIFTY will continue to resist to 200-DMA which is 8154 at Close levels and therefore, the behavior of NIFTY vis-à-vis this level of 200-DMA will be critical to watch out for. It would be critically important for the NIFTY to move past the 200-DMA and stay above that to mark and confirm reversal on the Chart.

For today, the levels of 8154 and 8230 will act as immediate resistance levels for today. The supports come in at 8050 and 7975 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.9830 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACDcontinues to remain bearish as it trades below its signal line. If no major downsides are seen and if we see some ranged consolidation, this indicator is moving towards reporting a positive crossover.

On derivative front, the NIFTY December futures have added over 6.04 lakh shares or 4.28% in Open Interest. This now vindicates our reading that short covering that was seen on Friday need to be replaced with fresh longs and this is what is been seen the Markets.

Coming to pattern analysis, the NIFTY has continued to show minor up tick after it formed a higher bottom on the Daily Close Charts. However, it still rules below 200-DMA and this level will continue to act as resistance at Close levels. Not only this, even if the NIFTY continues to trade with positive bias, this level is likely to cause the Markets to consolidate in a broad range. However, with all likelihood, the NIFTY has formed a near term bottom.

Overall, we continue to reiterate to avoid fresh shorts and utilize dips to make select purchases. In all likelihood, the NIFTY may consolidate in a broad range and is likely to trade with positive bias. However, for a pullback to sustain the NIFTY will have to move past 200-DMA and trade above that at close levels. Overall, while downsides may be utilized to make select purchases, IT and select Mid Caps will continue to outperform. Overall, volatility may remain but positive consolidation can be expected with upward bias.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member: 

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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

Daily Market Trend Guide -- Monday, November 28, 2016

MARKET TREND FOR MONDAY, NOVEMBER 28, 2016

The NIFTY had a session with decent gains on Friday as it showed sustained wave of steady short covering while it ended near the high point of the day while temporarily marking an immediate bottom on the Daily Charts. Given the bottom to get confirmed, the levels of 7975-8010 will be critical pattern support to watch out for. Today, we might see a stable opening and NIFTY might show some positive bias to continue with its up move but its behavior vis-à-vis the levels of 200-DMA which is 8150 will be crucial to watch and is likely to act as resistance at Close levels. The NIFTY is still not completely out of the woods and its continuation of a pullback remains with certain caveats to watch for.

For today, the levels of 8150 and 8185 will act as immediate resistance levels. The supports come in at 8045 and 7980 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.1721 and it has just crossed above 30 from a bottoming formation which is bullish. Otherwise it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish while trading below its signal line.

On the derivative front, the NIFTY December futures have shed over 8.67 lakh shares or 5.78% in Open Interest. This makes it very much evident that the up move that we saw on Friday has been purely on account of short covering. It is necessary that this gets replaced with fresh buying in order to further fuel the pullback.

Coming to pattern analysis, the NIFTY, at closing levels, has formed an intermediate bottom at 7929 levels. It has formed a higher low at Close at 7965 and has moved on from there. If the current pullback continues, the immediate levels that we should look at would be 200-DMA which is 8150 today. It is important to note that even if we continue with the pullback, we would still remain in the current downtrend and reversal yet to get confirmed.

Overall, the coming days will remain interesting to watch for. The reason being, the NIFTY has shown a strong tendency to pullback but on the other hand, this has happened on account of heavy short covering. It would be important to see if this gets replaced with fresh buying otherwise, NIFTY will once again remain vulnerable to selling at higher levels. The moving past and sustaining above the 200-DMA will be crucial for the  pullback to last and move towards confirmation on an immediate bottom.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member: 

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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