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The Markets yesterday had an remarkable session, wherein, after spending the morning trade in a range bound volatile manner, it saw recovery in the later part of the day to end the day with decent gains, and in the process the Markets have formed higher top and similar bottom on the Daily High Low Charts.
For today, expect the Markets to open on a mildly positive note and look for directions, and the intraday trajectory shall continue to play critically important to decide the trend for today, along with the volumes.
With the Markets expected to open on a mildly positive note and trade positive at least in the initial trade, the levels of 5045 and 5090 shall act as resistance and the levels of 4980 and 4955 are expected to act as supports.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 45.9497 and continues to remain neutral as it shows no negative divergence or failure swings.
The Daily MACD continues to remain bullish as it trades above its signal line.
The Markets saw the recovery coming in on back of much higher volumes than the previous session, which, in a way is a positive sign for the Markets. Both FIIs and DIIs have remained net buyers in Equities.
The Markets have formed almost similar bottoms in last three sessions which shows the support coming in at these levels and after pullback from these levels, there is discomfort seen at these lower levels. Yesterday’s pullback has seen decrease in Open Interest in Nifty futures which indicates it was heavy short covering and this levels is likely to act as immediate support.
All and all, it is important to see if this short covering gets replaced with fresh longs. Until Markets reacts to RBI announcements yesterday, it is likely to remain in a range and also bit volatile. Overall, cautiousoptimism is advised for today.
The Markets yesterday came off over 100-points from its day's low to end the day flat with nominal loss of 5-points and in the process have formed a higher top but similar bottom on the Daily High Low Charts. The session yesterday was market with very low, lower than average volumes.
For today, we can again expect the Markets to open on a flat note and look for directions. Given the lack of volumes, the intraday trajectory that the Markets form would be critical for the intraday trend. For today, the levels of 4985 and 5025 shall act as resistance and the levels of 4910 and 4880 shall act as supports.
All lead indicators present neutral to positive indicators. The RSI--Relative Strength Index on the Daily Chart is 41.1328 and it shows no negative divergence or failure swings and is therefore neutral. The Daily MACD continues to remain bullish as it trades above its signal line.
The FIIs and DIIs have remained net buyers yesterday. Also, the NIFTY futures have added a nominal 0.25% of Open Interest and has not reported any decrease, signifying there has been no unwinding of long positions. Also, the volumes, which have been lower than its average can be considered as a positive point in the correcting Markets. Overall, the Markets has relatively less downside, however, it shall continue to trade volatile and range bound and shall await RBI Policy announcements on Friday, 16th, wherein a rise of 25 basis points rate hike is discounted for.
All and all, it is highly recommended to remain highly selective and adopt a stock specific approach while continuing to protect profits at higher levels. Overall, cautious outlook is advised for the day, while avoiding shorts.