Daily Market Trend Guide -- One of India's most accurate and highly acclaimed Daily Market Trend Guide which brings an in-depth technical analysis of Indian Equity Markets every morning before the Market Opens in your mailbox. Gemstone Equity Research & Advisory Services offer Premium and PERSONALIZED Stock Market Advice.
Sunday, January 18, 2015
Daily Market Trend Guide -- Monday, January 19, 2015
The Markets had a volatile and range bound session again on
Friday as it ended the day with minor gains after capped movement. The Markets
saw a negative opening but formed its intraday low of 8452.25 in the early
minutes of the trade. Post this negative opening, the Markets recovered in the
morning trade to trade flat. The Markets witnessed a range bound sideways
movement thereafter and hovered around its previous close levels. It was in the
second half that the Markets saw some up move as it went on to add some gains.
It surged a bit to form the day’s high of 8530.75 in the late afternoon trade.
It hoveredaround this level and
retraced a bit to finally end the day at 8513.80, posting a minor gain of 19.65
points or 0.23% while forming a similar top but higher bottom on Daily Bar
MARKET TREND FOR MONDAY, JANUARY 19, 2015
The Markets are likely to witness a flat to modestly
positive opening and is expected to continue with its up move but initially
witness a range bound trade. The Market is now trading above its all averages
and under such structure is usually expected to extend itsgains. However, given the technical structure
of the Charts, some ranged movements also cannot be ruled out.
The levels of 8545 and 8590 would act as immediate resistance
on Daily Charts whereas the levels of 8452 and 8410 can act as support.
The RSI—Relative Strength Index on the Daily Chart is
62.0565 and it has reached its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergences. The Daily MACD is bullish
as it trades above its signal line. On Weekly Charts, RSI is 64.5743 and
remains neutral as it shows no bullish or bearish divergence or any failure
swing. The Weekly MACD remains bearish trading below its signal line.
On derivative front, the NIFTY January futures have shed
over 5.70 lakh shares or 2.77% in Open Interest. This, as we have been
mentioning in our previous editions of Daily Market Trend Guide, is little
cause of worry as each rise is being attributed more to short covering than
fresh buying. It is necessary for the Markets that it sees fresh positions
being built up on the long side which would fuel its upside.
Coming to pattern analysis, the Markets currently trades
above all of DMAs. In event of any downside, the 50-DMA is again expected to
act as support. Given the overall structure and F&O data, there are also
chances that the Markets see some ranged movements before it continues with its
up move. The overall trend remains intact.
All and all, it is necessary that we continue to exercise
caution in the Markets. There are chances that the Markets see some selling
pressure from higher levels and consolidate before it moves up again. This
ranged movement is also likely to see some volatility ingrained in it. Overall,
it is advised to refrain from aggressive purchases. Cautious optimism is
advised for the day while adopting highly stock specific approach.
Consulting Technical Analyst, Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA