Daily Market Trend Guide -- Tuesday, January 05, 2016

MARKET REPORT                                                                                January 05, 2016

Following global weakness, the Markets had a thoroughly disappointing session as it opened on a resilient note but then ended the day with a deep cut in line with its peers. The Markets saw a lower opening but it did show resilience as well. At one point of time in the morning trade, the Markets had managed to recover chunk of its opening losses while it formed its intraday high of 7937.55. However, it was the rest of the session that proved to be grossly disappointing one. The Markets started to pare recovered points once again and this time remained in falling trajectory for the rest of the session. While remaining in falling trajectory, the Markets kept making gradual lows. It went on the breach the important intraday supports while it formed its day’s low of 7781.10. It finally settled the day at 7791.30, posting a net loss of 171.90 points or 2.16% while forming a lower top and sharply lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JANUARY 05, 2015

Markets may see some breather from the weakness that it saw yesterday but at the same time, some amount of bearish undertone is likely to persist for the immediate short term. The Markets are set to open on a quiet note and look for directions. It has breached certain levels yesterday and on the way up today, they are likely to pose some resistance to the Markets.  The Markets have penetrated the support of rising trend line and this is likely to pose resistance to the Markets going ahead.

For today, the levels of 7840 and 7875 will act as immediate resistance for the Markets. The supports come in at 7740 and 7715 levels.

The RSI—Relative Strength Index on the Daily Chart is 45.9819 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above it signal line.

On the derivative front, the NIFTY January series have added over 8.04 lakh shares or 4.14% in Open Interest. This clearly indicates addition of fresh shorts in the system.

Coming to pattern analysis, we have been mentioning often in our previous edition of Daily Market Trend Guide that the levels of 100-DMA and 8000, have remained sacrosanct. These levels once again continued to remain major resistance for the Markets. In yesterday’s session, the Markets have violated one important pattern support. This pattern support is in form of a rising trend line drawn from the lows of the Markets which it formed in September 2015. The Markets have violated this support and therefore in event of any pullback, this level might pose some resistance to the Markets.

All and all, volatility and uncertainty will rule the Markets in the immediate short term. With the yesterday’s downside, the structure of the Charts have somewhat got damaged to some extent and it will a while by the time the Markets gathers its momentum on the upside once again. The levels of 7840-7860 will continue to pose resistance in event of any pullback. It is advised once again to remain very selective on stocks and curtail the overall exposures in the Markets for the immediate short term.

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

Daily Market Trend Guide -- Monday, January 04, 2016

MARKET REPORT                                                                                           January 04, 2016

The Markets saw a session of modest gains as it ended the day on a positive note in the range bound session. The Markets saw a quiet and flat opening but it soon drifted into the negative in the morning session while it formed its intraday low of 7909.80. Though the Markets continued to trade in negative territory in the morning trade, it gradually recovered all of its morning losses to trade flat and briefly in the positive. However, the afternoon trade once again saw the Markets drifting as it traded in the negative territory. The Markets overall remained quite directionless and in a much capped range. It was the late afternoon trade which saw the Markets giving a sharp spurt. The Markets traded in the positive once again and even went on to form the day’s high of 7972.55. After hovering once again in a capped range, the Markets finally settled the day at 7963.20, posting a net gain of 16.85 points or 0.21% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, JANUARY 04, 2016

The Markets are expected to open on a modestly lower note following reaction of the Asian Markets to the weak Chinese PMI Data. However, it is important to note that though we may see lower opening, the Indian Markets are expected to show relative resilience and the levels of 50-DMA are expected to lend a good and important support to the Markets. There are fair chances that post negative opening; we see a ranged movement and improvement later as we go ahead in the session.  The levels of 50-DMA will be important to watch out for.

For today, the levels of 7981 and 8000 will act as important support levels for the Markets. The Support come in at 7905 and 7870 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.6777 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 stays bullish as it trades above its signal line. On the Weekly Charts, the Weekly RSI is 48.2460 and it remains 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.

On the derivative front, the NIFTY January series have added over 4.60 lakh shares or 2.43% in Open Interest. The NIFTY PCR stands at 0.76 as against 0.77 on Friday.

Coming to pattern analysis, it is very much evident that though the Markets have managed to keep its head above 50-DMA post minor consolidation after the pullback, the levels of 100-DMA and the all important pattern resistance of 8000 have remain sacrosanct. The Markets have continued to show retracement at least twice it reached near it. The 100-DMA is falling and today it stands at 7981.Therefore, 7981 and 8000 will continue to act as major resistance for the Markets. No fresh strong up move shall occur until the Markets moves past these levels. Until it moves past these levels, the Markets will continue to witness selling pressure from near these levels. Also, while breaching these levels on the upside, it will have to do so with good volumes and participation.

Overall, until the levels of 7980 and 8000 are breached, the Markets are once again expected to see consolidation near these levels. This is likely to lead to intermittent selling pressures from higher levels and some amount of volatility is likely to remain ingrained in the Markets. It is advised to vigilantly protect profits, if any, at these levels and continue to keep purchases moderate until we see fresh upward breakout from the significantly important resistance levels.

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