Gemstone Equity Research & Advisory Services

Monday, September 19, 2011

Daily Market Trend Guide -- Monday, September 19, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets saw a volatile session, trading in a 60-point range, going in both the directions violently reacting to the RBI Rate announcements and finally ended the day with nominal gains and in the process have continued to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a lower / negative note and look for directions. The levels of 5170 have continued to act as an immediate resistance and this continue to act so in near term.

For today, with the Markets expected to open on a negative note, the intraday trajectory that it forms post opening would be critically important to decide the trend for today, as well as coming week.

Today, with negative opening expected, the levels of 5100 and 5140 and 5170 shall act as resistance and the levels of 5050 and 5010 shall act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 50.3695 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the Weekly charts, the RSI is neutral at 41.0305 without showing any negative divergence or failure swing. The Weekly MACD remains bearish as it trades below its signal line.

Given this reading, the Markets are expected to remain volatile in a capped range. Further to this, the level of 5177 is also a similar pattern resistance on Weekly Charts, like the levels of 5170 on the Daily Charts. Having said this, the markets are likely to have a confirmed reversal only after it moves past the levels of 5170, though it has made a higher bottom post forming a low.

All and all, stock specific actions will continued to be witnessed. Traders are advised to remain highly selective and keep protecting profits on either side though the trend remains intact. Resilience may be seen from the Markets today. Positive caution is advised.

Milan Vaishnav,
Consulting Technical Analyst,
http://www.mymoneyplant.co.in/
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Sunday, September 18, 2011

Daily Market Trend Guide -- Friday, September 16, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday consolidated in a capped range for half of the session, but again saw a pullback in the second half as it managed to end the day with decent gains forming a higher top and higher bottom on the Daily High Low Charts.

For today, we may see the Markets opening on a positive note and continue with its up move at least in the initial trade.

The RBI shall announce Rates today and 25 bps of the rate is discounted for by the Markets and anything above this shall seriously harm the sentiments in the immediate term.

The Markets shall open on a positive note and shall trade in a range until Rates are announced and then react to it. Then once the Rates are announced, it shall react to it.

For today, the levels of 5105 and 5170 shall act as resistance and the levels of 5030 and 4990 are immediate supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 49.8477 and it is neutral as it shows no negative divergence or failure swings.

The Daily MACD continues to remain bullish as it trades above its signal line.

All lead indicators continue to point towards continuing pullback. The FIIs and DIIs have also continued to remain net buyers. However, NIFTY Futures have been showing net decline in Open Interest since previous two sessions. This implies that the up moves that we have seen has been more due to short covering rather than fresh buying. It is critically important that this gets replaced with fresh buying. The levels of 5170 shall continue to act as major pattern resistance and it would be critically important that to confirm a trend reversal, the Markets will have to move past this levels. Until this happens, we will continue to see the Markets trading in a broad volatile range. All and all, it is advised to continue with the stock specific approach and also protect profits at higher levels while avoiding shorts. Cautious outlook is advised for today.