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The Markets made yet another up move at Close basis yesterday as it ended the expiry day with yet another decent gain and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.
Today, it is going to be no different with the Markets slotted to open again on a positive note and look for directions.
With the Market poised to open on a positive note again, it is likely to depend again on its intraday trajectory for its trend that would be critical given the structure of the Charts. For today, the levels of5670 and 5690 shall act as resistance and support exists at 5580 and 5520 levels.
The lead indicators remain in place with RSI—Relative Strength Index on the Daily Charts at 63.9704. It has reached its highest value in last 14-days which is statistically bullish. The Daily MACD continues to trade above its signal line.
At this juncture, we need to draw your attention on certain important points. The Markets, especially in last 3-4 sessions have moved up on liquidity and NOT as per technicals as it has defied many technical factors. On the Charts, the DMAs (50 & 100) have reported negative crossovers in spite of the rise and also the Markets have disregarded the existence of both 50 and 100 DMA. This is one of the signs of artificial move, especially beyond the 50 and 100 DMAs. Also, during all these session, the Markets have shown a one-way rise of nearly 400 points or nearly 8% which makes the rise unsustainable and unhealthy in absence of any consolidation or correction.
All and all, it is likely that the Markets opens high but near the resistance of falling trend line drawn from 6388 levels joining 6181, and 5864 levels. After opening, intraday trajectory would thus be important. It is strongly advised to keep away from taking direct long positions in Index components as there are high chances that an investor gets trapped at such higher levels. High degree of caution is advised for today.
The Markets continued its up move on the second last day of the expiry of the current series by opening up and then trading in a capped range andclosing with gains. The Markets have, in this process, formed a higher top and higher bottom on the Daily High Low Charts.
Today, we enter into the expiry day of the current June Series and the day, as like yesterday, is expected to remain largely dominated with rollover centric activities.
Today, in line with positive global markets, we may again see the Markets opening on a positive note and look for directions, largely depending on the intraday trajectory that it forms but the session, as mentioned above, will see more activities remaining rollover centric. For today, the levels of 5630 and 5645 shall act as resistance and the levels of 5540 and 5520 shall act as supports.
The RSI—Relative Strength Index on the Daily Charts is 61.1047 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence.
The Daily MACD continues to trade above its signal line.
At this juncture, we would again point out that after the lows the Markets made on June 20th, the Markets have moved up / pulled back over 400 points or nearly 9% in consecutive sessions and this is certainly unhealthy given the fact that it did not resist to both of its 50-DMA and 100-DMA especially when both of these averages have reported a negative crossover. This clearly indicates that the up move that we saw, especially in last 2-3 sessions is momentum driven, rollover centric and in defiance of some technicals.
All and all, today we may see similar behavior in the Markets as we enter into expiry, but we continue to maintain caution against any fresh long position as the Markets badly need to correct or at least consolidate to make the pullback healthy and sustainable. We continue to advice to adopt cautious outlook and keep protecting profits at higher levels.
The Markets yesterday remained volatile but range bound as it pared its initial gains but later recovered to close with modest gains and in the process have formed a similar top but higher bottom on the Daily High Low Charts.
Today is going to be no different as the Markets are likely to open on a positive note but has a bright chances to correct and consolidate later with the intraday trajectory playing a critical role.
For today, expect the Markets to open on a positive note and look for directions. With the Markets expected to open on a positive note, the levels of 5560 and 5595 shall continue to act as resistance and the levels of 5496 and 5460 are likely to act as supports. The 50 and 100 DMA levels of 5531 and 5540 shall continue to act as possible resistance at the Close levels.
The RSI—Relative Strength Index on the Daily Chart is 57.4096 and is shows no negative divergence. Since it has reached its highest value in last 14 days, it is bullish. The Daily MACD continues to trade above its signal line.
On Candles, A Spinning Top has occurred. During a rally or near new highs this can be a sign that the prices are losing momentum for the immediate short term.
Having said this, FIIs have remained net sellers in NIFTY Contracts by 3091 contracts and in Stock Futures by over 22000 contracts.
Secondly, the Markets have not yet been able to significantly move past and Close above its 50 and 100 DMA as is still within in filters. With the Markets seeing a pullback of over 5%, come mild correction or consolidation is required to keep this pullback healthy and sustainable in the long run and it seems imminent.
All and all, there are chances that after a positive opening, the Markets starts consolidation / mildly correcting again. It is continued to be advised to remain highly stock specific in action and keep protecting profits at higher levels. As like yesterday, cautious approach is advised for today.
The Markets continued with its up move yesterday to close with decent gains even though it traded in a capped range after initial up move and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.
Today, expect the Markets to open on a positive note and continue with its up move at least in the initial trade. With the Markets expected to open on a positive note, the levels of 5540 and 5560 shall continue to act as resistance and the levels of 5480 and 5455 shall act as supports.
The Markets have resisted at the 50-DMA and 100-DMA and have closed a notch below that and these levels are likely to continue to act as resistance ant Close levels.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.0964 and it has reached its highest value in last 14-days, which is bullish. Also, the RSI has set a new 14-period high but the NIFTY has not which is bullish divergence.
The Daily MACD has just managed to cross above its signal line and it now trade above that.
Having said this, the Chart Pattern Analysiscomes into play. The Daily Moving Averages, i.e. the 50-DMA and the 100-DMA has reported a negative crossover as the 50-DMA has cut the 100-DMA from above which is bearish in the short term and may bring in short term weakness. Apart from this, the DIIs have remained net sellers and FIIs have been seen short covering heavily in the derivative segments.
Overall, the Markets are definitely likely to resist at the 50 and 100 DMAs at 5540 levels at close. Also, since the Markets have risen over 5% in last five sessions, it needs to consolidate and mildly correct. It is advised to take long positions only on highly selective basis and keep protecting long profits at higher levels and long positions may be avoided in index components. There are chances that the Markets opens positive but then consolidates. Cautious approach is advised for today.
As very clearly advised in our edition dated June 21st, the NIFTY recovered over 282 points from its day’s low made on the day which Markets reacted to DTAA treaty developments. On Friday, the Markets gave one of the major expected pullbacks and closed the day with robust gains and in the process have formed a sharply higher top and higher bottom on the Daily High Low Charts.
For today, expected the Markets to give a subdued and quiet start and is expected to consolidate a bit after Friday’s up move. With the Markets expected to open on a quiet and negative note following global weakness persisting, there are chances that the cuts may be limited and we once again continue to consolidate and trade in a range with the levels of 5500 and 5540 acting as resistance and the support coming in 5350.
Having said this, there appears a contradiction on the Charts if the lead indicators are readand the Chart Pattern Analysis is done. The RSI—Relative Strength Index on the Daily Chart is 52.0313 and it has reached the highest value in last 14-days which is Bullish. Also, RSI has set a new 14-day high where as NIFTY has not yet, which is Bullish Divergence. The Daily MACD, however, continues to bearish as it continues to trade below its signal line. On the Weekly Charts too the Weekly MACD continues to trade below its signal line and the RSI remains neutral as it shows no negative divergence or failure swings.
As per Chart Pattern Analysis on the Daily Charts, the 50-DMA and 100-DMA may give a negative crossover. Further, even with the pullback, we are still in overall falling channel with the immediate resistance coming in at 5500 and 5340 levels. All and all, this will all end up keeping the Markets slightly consolidating or mildly correcting and again thus, the Markets are likely to trade in a range. With slightly negative opening expected today, it would be essential for the Markets to move past 5475 to continue with its up move and intraday trajectory would be critical. Cautious, stock specific approach is advised for today.