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The Markets had a quiet and directionless session yesterday with it moving in either direction after paring the early morning gains and finally ended the day with a meager gain of 2.45 points, forming a parallel bar with a slightly lower top but higher bottom on the Daily High Low Charts.
Today, it is likely to be no different. The Markets are expected to open on a flat and subdued note and again look for directions. This time, along with the intraday trajectory that the Market forms, the volumes too would be critical as the yesterday’s session was completely devoid of volumes that failed the Markets to capitalize on the positive opening.
For today, with the Markets expected to open on a flat ad subdued note, the levels of 5325 and 5380 shall act as resistance and the levels5225 and 5200 are likely to act as supports.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 31.9505 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to trade below its signal line.
Given this reading, the Markets have accumulated after giving a steep fall two days back after reacting to DTA news.Technically speaking, as per the Chart Pattern Analysis, this is not a strong sign if the Markets accumulated on the lower side after the fall. However, given the RSI reading, though the down side may be limited, it would be extremely critical and important for the Markets to move past the levels of 5325 to successfully attempt a technical pullback, still continuing to remain in overall downtrend. Apart from this technical reading, the NIFTY Futures have been constantly adding open interest. FIIs too have been reported net buyers in Futures Segment. There are chances that we may see a pullback due to this combined reading, but sooner the Markets moves past 5325-5330 levels, the better. Until this happens, extremely cautious and stock specific approach is advised, still continuing to avoid shorts as the downside remains limited. Positive caution is advised for today.
Though the Markets did attempt a pullback yesterday, it pared most of its gains in the second half of the session to end the day with modest recovery and in the process have formed a lower top and a higher bottom on the Daily High Low Charts.
For today, expect the Markets to be in recovery mode again and open on a positive note and trade in the positive, at least in the initial trade.
With the markets expected to open on a positive note, the intraday trajectory it forms would be critical for the Markets to help sustain and capitalize on the expected positive opening.
For today, the levels of 5320 and 5360 are expected to act as resistance and the levels of 5280 and 5255 are expected to act as support.
The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 31.6322 and is neutral as it does not showany negative divergence or failure swing. However, it has move above its OVERSOLD range and has thus given a buy signal. The Daily MACD continues to trade below its signal line.
On the Candles, A Spinning Top has occurred. This is irrelevant as it has occurred near the low price levels.
As per the Chart Pattern Analysis, even if we continue to remain in the overall downtrend, the Markets are likely to give a technical pull back at least in the range of 1-2%. This likelihood is further supported by the F&O data which has shown NIFTY adding Open Interest since last couple of sessions and clear discomfort at lower levels.
In support of this technical reading, the positive opening will be further supported with the stable and positive global markets, however, as said earlier, intraday trajectory wouldbe critically important for the Markets to capitalize on the possible positive opening. It is advised to maintain stock specific outlook. Fresh purchases may be made while protecting profits at higher levels. Positive caution is advisedfor today while avoiding shorts.
The Markets gave a terrible and extremely volatile reaction to the news of renegotiations of DTAA Agreement between India and Mauritius, a place which originates 40% of our FDI. The Markets reacted terribly to the one-off statement and plunged within seconds to its 4 month low and ended with 2% losses and in the process have given a sharp lower top and lower bottom on the Daily High Low Charts.
As we have done on last couple of occasions, in time of chaos and panic, we would, as always, endeavor to present correct picture.
For today, expect some respite from the severe weakness that we saw as the Markets are likely to trade in a narrow range today and attempt a technical pull back. During such times, it is UTMOST NECESSARY to keep our head in place when others are losing theirs and need to analyze few important points.
First, the Markets have got OVERSOLD. The RSI— Relative Strength Index on the Daily Chart is 29.3854. Though it has reached its lowest value in last 12-days, it is now in OVERSOLD range.Secondly, the Markets are at their Double Bottom support and the low that we saw yesterday is a major support, thus indicating a very limited downside, especially from such OVERSOLD levels. Thirdly, Markets have relentlessly added Open Interest in NIFTY Futures wiping out the premium and converting it in discount indicating significant creation of short positions. Lastly, the DTAA issues is not a new one, and as very categorically clarified by the MoF, the imposition of capital gains tax is NOT part of the renegotiation agenda.
Having said all this, it is utmost important to not to panic and lost patience. It is very strongly advised to maintain liquidity and hang on to open positions. In fact these levels should be used to make selective purchases. A day here or there, Markets are poised to see, at least a technical pullback. Positive caution is advised for today.
The Markets on Friday continued its bearish undertone for third day in a row to end the day with modest losses and in the process have continued to form a lower top and lower bottom on the Daily High Low charts.
For today, we are likely to see a flat to mildly positive opening in the Markets and it is expected to trade in a capped range at least in the initial trade. Today, with the Markets expected to open on a flat to mildly positive note, the intraday trajectory that it forms shall continue to remain critically important for today’s trend. The levels of 5400 and 5436 shall continue to act as resistance and the levels of 55440 and 5320 shall act as important support in form of Double Bottom on the Daily Charts.
The lead indicators continue to show some weakness, though they are moving towards being Oversold. The RSI-Relative Strength Index on the Daily Chart is 36.0317 and it shows no negative divergence. Since it has reached its lowest value in last 14-days, This is a Bearish Indication. Same is the case with RSI on the Weekly Charts too. The Daily MACD continues to trade below its signal line.
Having said this, it is important to note that the Markets are resting at important support levels of 50-DMA on its Weekly Charts with the support coming in at 5340. Also, the advance tax numbers that have come in are far better than expected which have negated the slow down fears to larger extent. Furthermore, in last couple of sessions, the Markets have went on to add significant amount of Open interest which shows heavy creation of shorts at this levels. All and all, it is thus continuedto be advised to remain ultra cautious before going shorts as a pull back can be seen. Markets are likely to continue to remain in a range and bit volatile. Adopting very stock specific approach with positive optimism is advised for today.