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.
Tuesday, January 20, 2015
Daily Market Trend Guide -- Wednesday, January 21, 2015
The Markets saw a strong up move as it touched its fresh
lifetime highs again fuelled by FII inflows and ended the day with robust
gains. The Markets saw a positive opening and saw nearly one-way trend as it
never really witnessed any selling pressure at any level during the day. After
positive opening, the Markets saw itself trading with modest gains in sideways
trajectory. Though it successfully maintained those gains, it saw fresh strength
and strong up move in the second half of the session. It surged ahead and went
on to move past its previous lifetime highs and formed a fresh intraday and
lifetime high of 8707.90. It smartly maintained those gains and finally ended
the day at 8695.60, posting a strong gain of 144.90 points or 1.69% while
forming a sharply higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, JANUARY 21, 2015
The session is likely to remain a tricky and cautious affair
for the Markets. The Markets, technically speaking, are expected to open and
trade positive, at least in the initial trade. However, though it may continue
to form fresh lifetime highs once again, some amount of consolidation is likely
at higher levels. However, we may not witness any major profit taking, but the
up move might be temporarily halted at higher levels.
The Markets now trade in uncharted territory once again. The
expected resistance levels can be 8710 and 8145 while supports exist at 8640
and 8565 levels.
The RSI—Relative Strength Index on the Daily Chart is
68.9977 and it has touched its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergence. The Daily MACD remains
bullish while trading above its signal line. On the Candles, A rising window occurred(where the top of the previous shadow is below the bottom of the current
shadow).This usually implies a
continuation of a bullish trend.There
have been 8 rising windows in the last 50 candles--this makes the
current rising window even more bullish.
On the derivative front, NIFTY January
futures have added a massive 16.68 shares or 8.27% in Open Interest. This is a
very significant addition in OI which clearly implies heavy buying and creation
of fresh long positions.
Returning to pattern analysis, the Markets
have moved past its previous lifetime high to form a fresh one. Theoretically
speaking, the previous lifetime high is usually expected to pose some minor
resistance before the Markets breaks out on the upside. Having this not
happened, we cannot rule out some minor consolidation at higher levels.
However, in the same breath, with the rally being highly liquidity driven, we
can also expect the Markets to continue with its up move and show strength and
this would be perfectly normal.
Overall, with the trend remaining extremely buoyant
and intact, one can continue to make fresh purchases on selective levels. At
the same time, the profits on existing long positions too need to be vigilantly
monitored. Overall, while remaining vigilant at higher levels, positive outlook
is advised for the day.
Consulting Technical Analyst, Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA