Daily Market Trend Guide -- Friday, January 09, 2015

MARKET REPORT                                                                                 January 09, 2015

Markets posed a smart pullback after two days of pathetic downsides as it ended the day with decent gains. With the global cues being favourable and the technical factors supportive, the Markets saw a gap up opening as it opened on a strong and decent note. These gains were maintained in the first half of the session s the Markets moved in 25-odd points range in sideways trajectory. The second half of the session saw further strength coming in as the Markets perked up further and went on to post the day’s high of 8243.50. These levels too were maintained and the Markets finally ended the day at 8264.60, posting a decent and strong gain of 132.50 points or 1.64% while forming a sharply higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JANUARY 09, 2015

There are bright chances that the Markets would continue with the pullback. We can expect a positive opening tomorrow and the levels of 100-DMA would continue to remain important, but from a different perspective. It is expected to act as support in the immediate short term. The intraday trajectory and volumes too would remain important.

The levels of 8275 and 8330 would act as immediate resistance. The levels of 8140 would continue to act as immediate major support.

The RSI—Relative Strength Index on the Daily Chart is 48.1590 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD is bearish trading below its signal line.

On the derivative front, the NIFTY January futures have shed 9.17 lakh shares or 4.90% in Open Interest. This means that this pullback has been aided by very sharp short covering at lower levels. It would be important that this replaced by fresh longs in the system.

Taking a cue from pattern analysis, the Markets have taken support at its 100-DMA twice in recent past and therefore this levels have held on as major support. Though the pullback that we have seen has been due to short covering, the pattern analysis shows that the Markets are likely to continue with is pullback and may advance to its further immediate resistance of 50-DMA, i.e. around 8330 levels.

Overall, the Markets are likely to continue with its pullback. However, it is important that apart from short covering which has aided the pullback, we also see fresh longs being taken. Purchases from lower levels can be made and selective stock picking would continue. While remaining vigilant at higher levels, the overall remains intact and therefore sectoral out performance would continue.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331

milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Thursday, January 08, 2015

MARKET REPORT                                                                           January 08, 2015

Markets had a terribly volatile session as the Markets struggled with its 100-DMA levels for the entire day to close a notch below that level. The Markets saw a quiet opening and post such mildly positive opening, the Markets gained some more strength in the morning trade to form the day’s high of 8151.20. However, these modest gains were short lived as the Markets pared them to trade near its previous close levels. It further dipped into negative in the afternoon trade and went on to form the day’s low of 8065.45 losing nearly 85-odd points from its day’s high. The Markets recovered those losses in the second half of the session but it spent the most part of the second half in a ranged but volatile manner moving crisscross its 100-DMA. It finally settled the day at 8102.10, posting a modest loss of 25.25 points or 0.31% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, JANUARY 08, 2015

The Markets are expected to attempt a pullback after losing nearly 300-odd points in just two sessions. We can expect a quiet to mildly positive opening in the Markets but the levels of 100-DMA would be very important levels to watch for. The Markets have closed a notch below that though they continue to be very much within the filter. In order to attempt a pullback, the Markets will have to move past this level and trade above that.

The levels of 8132, which is the 100-DMA for the Markets would be its immediate resistance followed by 8225. The supports come in at 8065 and 8010 levels.

The RSI—Relative Strength Index on the Daily Chart is 39.7161 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergences. The Daily MACD is bearish as it trades below its signal line after reporting a negative crossover.

On the derivative front, NIFTY January futures have shed yet another 4.41 lakh shares or 2.31% in Open Interest. This shows some more unwinding of longs but at the same time, it has moderated to a greater extent. It would be important to see them being replaced with fresh longs.

Going by pattern analysis, as we had mentioned yesterday, the Markets have shown a technical misbehaviour by completely disregarding the 50-DMA while coming down as it has resisted to this very level for couple of days before inching upwards. However, now with the Markets closing a notch below its 100-DMA, it will have to move past this level in order to avoid any weakness. Until the Markets moves past the 100-DMA, we would continue to see some weakness in the immediate short term.

Overall, the analysis continues to remain on the same lines. The Markets will resist to its 100-DMA which is 8132. It would be important for the Markets to move past this level for the pullback to occur and this is also likely to keep the Markets range bound and volatile. Selective stock picking from lower levels can certainly be done. While keeping overall leverage under control, positive caution is advised for the day.

Milan Vaishnav,

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

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com