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The Markets had a terribly volatile session yesterday as it ended the day with relatively moderate losses after opening weak, dipping further and thereafter recovering from its day’s lows.However, it still formed a lower top and lower bottom on the Daily High Low charts.
Technically speaking, even though the Markets have ended the day with losses, it has closed near the high point of the day and it is usually expected to continue with its recovery.
For today, expect the Markets to open on a moderately positive note and look for directions. Today, the intraday trajectory that the Markets form would be critically important as some stability is again expected to return in the markets. This will be due to some favorable technicals and also as the US Markets too recovered from its day’s low and Asian Markets are trading stable.
For today, the levels of 5145 and 5170 continue to act as resistance levels and the levels of 5050 and 5005 are expected to act as supports.
The RSI—Relative Strength Index on the Daily Chart is 54.0067 and it shows no negative divergence or failure swing and is therefore neutral.
The Daily MACD continued to trade above its signal line and is therefore bullish.
Though NIFTY has shedding Open Interest in current series, two important things to observed that we have been witnessing short covering near the 50DMA levels. This shows discomfort near those levels for further downside. Also, since the Markets are currently trading above its 50 DMA it can certainly be said that it is now attempting a reversal of trend and thus has an upside bias.
All and all, moderately positive opening and stability is expected in the Markets today. Stock specific activity and some amount of rollovers are expected to begin and seen. While protecting profits and avoiding shorts, overall, positively cautious approach is advised for today.
The Markets had a strong session yesterday as it opened on a positive note and went on to remain in upward rising trajectory to finally end the day with decent gains and in the process formed a sharply higher top and higher bottom on the Daily High Low charts.
For today, expect the Markets to open again on a moderately lower note and look for directions and since it is expected to open subdued, the intraday trajectory that it forms after opening would be critically important. For today, expect the Markets to open on a subdued note and in the process, the levels of 5110 and 5075 are expected to act as supports on the lower side.
The Markets have continued to trade within the broad trading range it has been trading in since August and thus, likely to remain so for couple of sessions.
The RSI—Relative Strength Index on the Daily Chart is 56.9107 and it does not show any failure swing. However, NIFTY has set a new 14-day high but RSI has not and this is Bearish Divergence. The Daily MACD continues to remain bullish as it trades above its signal line. On the Candles, A Rising Window occurred. This usually implies continuation of bullish trend it makes the pattern more bullish.
Having said this, there are two important things to note. Yesterday’s rise has come more out of short covering as NIFTY Futures have reported shedding of open interest with the rise and secondly, the Markets are yet tomove past the levels of 5170 which is required to break out of the broad trading range it has been trading in. As mentioned number of times in the past issues of Daily Market Trend Guide, the Markets need to move past the levels of 5170 for fresh and sustainable up move. So, until this happens, we are likely to see some consolidation again. It is necessary that the short covering is replaced by fresh longs. While avoiding shorts, stock specific approach is advised as the Markets are expectedto remain range bound with some volatility. Positive caution is advised for today.
The Markets yesterday opened lower on negative note but traded above its critical support levels throughout the session, but ended the day with losses forming a sharply higher top and higher bottom on the Daily High Low Charts.
Today, expect the Markets to open on a moderately positive note and look for directions. Yesterday, the Markets took support at its 50-DMA and this level today, which is 5004 is likely to continue to act as important support and it would be critically important to observe the behavior of the Markets vis-a-vis this level. It would be critically important for the Markets to trade above this level to avoid any further weakness.
All lead indicators continue to remain in place. The RSI--Relative Strength Index on the Daily Chart is 51.7251 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line.
The Markets have shed 8.79% in Open Interest and this is certainly not a good sign. This signifies profit taking from higher levels and it is now extremely important that the Markets sees fresh long positions being built. All and all, it is extremely important to see the behavior of the Markets vis-a-vis the levels of 5004. It is continued to be advised to avoid shorts as overall bias remains on the upside and stability is expected. Stock specific and cautiously poisitve outlook is advised for today.
The Markets yesterday expectedly consolidated as it pared all of its morning gains and spent rest of the session in sideward trading to finally end the day with nominal loss. However, it has still continued to form a higher top and higher bottom on the Daily High Low charts.
For today, expected the Markets to open on a lower note and consolidate at the lower levels on back of weakfish technicals and weak global cues.
The Markets yesterday gave its intraday high of 5160.20 and again it has resisted at the upper range of the broad rectangle trading range the Markets have formed.
Today, with the Markets expected to open on a lower note, the levels of 5075 and 5020 are expected to act as its supports.
The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.7643 and is neutral as it does not show any negative divergence or failure swings.
The Daily MACD continues to trade above its signal line and is therefore bullish and is not in oversold or overbought range.
It is important to note that the Markets consolidated yesterday on expected lines. It also traded with its average to lower volumes which is a sign typical of consolidation.
Further to this, the NIFTY Futures have added 2.18% in Open Interest which shows that there have been no unwinding done from higher levels but some short have been created.
Today, there are bright chances that we may see a lower opening but the Markets attempts to recover after the weak opening as the session progresses. The levels of 5170 on the Charts continue to remain immediate resistance and the Markets are expected to continue to consolidate on lower volumes with some amount of volatility ingrained in it. It is advised to continue to avoid shorts as the Markets are just consolidating and overall trend remains intact with upward bias.
After spending the half of the session trading flat and consolidating, the Markets perked up in the second half of the session on moderate volumes and ended the day with gains an in the process have formed a Parallel Bar, which slightly higher top and bottom on the Daily High Low charts.
Today’s session would be crucial as the Markets approaches one of its important resistance levels today, i.e. the upper range of the broad trading range it has been trading in.
For today, expect the Markets to open on a moderately positive note and trade in the positive at least in the initial trade. The Markets are expected to open around 5170-5175 levels and it would be critically important to observe the behavior of the Markets around those levels.
For today, the levels of 5170 and 5190 are expected to act as resistance the levels of 5110 and 5075 are immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 57.6720 and it has reached its highest value in last 14-days which is bullish. It does not show any divergence. The Daily MACD continues to trade above its signal line. On the Candles, an Engulfing Bullish Pattern has occurred and with current formation, it may be last engulfing top which indicates a top. However, this requires confirmation today.
Having said this, and taking into consideration the Candles, it is important to note that 5170-5175 is the upper range of broad rectangle the Markets have been trading in since August. Thus, it would be extremely important to see the behavior of the Markets vis-à-vis this level. There are fair chances that it consolidates post opening forming a sideward or falling trajectory and this may bring in some amount of volatility in the markets. It is important to observe around these levels and very selective stock specific approach is advised. It is also strongly advised to protect the profits vigilantly around these levels. Cautious outlook is advised for today.