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The Markets yesterday performed in quite disappointing manner as after trading in a capped range it weakened further in the second half of the session to end yet another day with losses. In this process, it has formed slightly higher top but sharply lower bottom on the Daily High Low Charts.
Today’s session is likely to be a kind of acid test for the Markets. The prevailing global weakness is likely to cause a gap down opening in the Markets today.
Thus, we can expect the Markets to have a gap down opening today and open significantly lower on weak global cues. With such weak opening expected, the levels of 580 and 5240 are likely to act as supports. For next sessions to come, the levels of 5440-5450 have now become immediate resistance levels.
The RSI—Relative Strength Index is 34.6701 and is does not show any negative divergence. However, it has reached its lowest value in last 14-days which is Bearish. The Daily MACD continues to trade below its signal line.
Having said this, it is important to note the following. With today’s expected weak opening included, the Markets would have lost around 450+ points or around 8% in last eight sessions and have added significant amount of Open Interest. Also, the volumes have remained lower side, relatively. Secondly, On Candles, An Engulfing Bearish Line has occurred. IF Engulfing Bearish Pattern occurs during downtrend, like in case of NIFTY, it implies a POTENTIAL REVERSAL.
All and all, from the above reading, the Markets will have weak opening but there are all chances that it may spend the day improving in the rest of the session.
It is thus advised to maintain patience without panic and strictly avoid shorts while holding on the existing positions and making selective purchases. A cautious outlook is advised with bias towards improvement as the day progresses.
TheMarkets showed a reluctant trend on either side asit neither recovered much nor it moved down further but ended the day with modest losses. However, it formed a sharply lower top and lower bottom on the Daily High Low Charts.
Today, we can expect the Markets to open on a mildly negative note and look for directions.
Today, the technical picture of the Markets and the F&O statistics slightly contradictive data. Today, following subdued global cues and weak technicals, we can expected the Markets to open down and trade negative at least in the initial trade and continue to depend grossly on the intraday trajectory that it forms during the day. For today, with such opening expected, the levels of 5422 and 5450 shall continue to act as resistance and the levels of 5378 and 5340 may act as supports.
The RSI—Relative Strength Index on the Daily Chart is 38.864 and it does not show any negative divergence. However, it has reached its lowest value in last 14-Days which is bearish. The Daily MACD continues to trade below its signal line.
On the Candles, A Falling Window has occurred which usually implies continuation of the bearish trend, which appears to be the case with NIFTY.
Thus, as explained above, the technicals of the Markets continue to paint a grim picture. Adding to this, the Markets opened and ended below the trend line support of around 5450 and this now shall act as temporary resistance. On the other hand, the NIFTY has added significant open interest since last two sessions. This may cause the Markets to see a intermittent pullback, though while continuing to remain in a range.
All and all, while intermittent pullbacks cannot be rule out, Markets continue to remain in negative channel. Itis, thus, critically important to vigilantly protect profits at higher levels, while still avoiding blanket shorts due to addition in OI. Overall, cautious outlook is advised.
Yesterday, the Markets saw a gap down opening following global weakness cues and even weaker technicals and remained in the negative territory through out the session seeing no recovery and ended yet another day with losses. In this process, it has also given a sharply lower top and lower bottom on the Daily High Low Charts.
Today, technical paint a weak picture. Thus, today, following weak technical cues and global weakness, we are again likely to see weak opening in the Markets today.
With weak and negative opening expected in the Markets today, the intraday trajectory that it forms post weak opening will again play a critically important role along with the volumes. For today, the levels of5935 and 5370 shall act as supports and the levels of 5480 and 5500 shall act as resistance on the upper side.
The RSI—Relative Strength Index on the Daily Chart is 42.2278 and it does not show any negative divergence. However, it has reached its lowest value in last 14-days which is Bearish.
The Daily MACD continues to remain bearish as it trades below its signal line.
Having said this, it is important to note the following. Yesterday, the Markets have closed near the weekly and daily support levels of 5430. Today’s weak opening will see the Markets opening below those levels. In event of this, this levels of 5430 shall become temporary resistance. However, at the same time, the Nifty Futures have shown heavy addition of open interest yesterday indicating creation of short positions in the Markets.
All and all, the Markets continue to remain technically weak. However, due to statistical reasons, we may see a minor pullback post negative opening which would heavily depend upon the intraday trajectory that the Markets will form. In view of this, it is advised to avoid blanket shorts until the intraday direction is established. Stock specific cautious approach is advised for today.
The Markets had a quiet and directionless session on Friday, wherein it opened below its critical resistance level of 50-DMA and that level remained its resistance for the rest of the day as the Markets ended the day flat with nominal losses, forming a slightly higher top but lower bottom on the Daily High Low Charts.
Today, following stable global cues, we can fairly expect a positive opening in the Markets and see some respite from the weakness that is persisting since last couple of sessions.
With the Markets expected to open on a positive note, it is expected to trade positive at least in the initial session.
For today, the levels of 5520 and 5545 shall act as resistance and the levels of 5440 and 5410 shall act as supports.
The RSI—Relative Strength Index on the Daily Chart is 43.4560 and it has reached its lowest value in last 14-days and this is BEARISH. It, however, does not show any negative divergence. The Daily MACD continues to trade below its signal line and is therefore bearish. On Candles, the Charts shows short term potential weakness. On the Weekly Charts, the RSI is 45.6723 and it does not show any negative divergence or failure swings and is neutral. The Weekly MACD is bullish as it trades above its signal line.
Again, as per Chart Pattern Analysis, it has a Descending Triangle Formation which a similar bottoms and falling tops, which is potentially bearish if the NIFTY breaks below 5200. Thus, keeping the above mixed and contrary readings on Daily and Weekly Charts, the Markets are fairly expected to remain in a broad range of 5225 on the lower side and 5520 on the upper side. For today, with the positive opening expected it would be critically important for the Markets to remain in positive intraday trajectory to capitalize on its positive opening. If it fails to do so, we may again see the Markets either trading in a range or drifting lower. Thus, it is still advised to continue with cautious approach even with positive opening and maintain cautious stock specific approach for the day.