Gemstone Equity Research & Advisory Services

Tuesday, October 11, 2011

Daily Market Trend Guide -- Tuesday, October 11, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday opened flat but spent the session in a rising trajectory as it ended the day near the high point of the day with decent gains and in the process have formed sharply higher top and higher bottom on the Daily High Low Charts.

Today’s analysis would be more or less same like yesterday but with important resistance levels coming in between.

For today, expect the Markets to open on a decently positive note and look for directions and it will be critically important that the Markets remaining in positive intraday trajectory.

For today, the Markets are likely to give a positive opening and trade in the positive at least in the initial trade. Today, the levels of 5034 in form of a minor double top and the level of 5053 which is 50-DMA of the Markets are likely to pose resistance today. In case of gap up opening, it would be important to see what Markets takes shape near these levels.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 50.4686 and is neutral as it shows no negative divergence or failure swing. The Daily MACD has reported a positive crossover and now trades above its signal line, which is bullish.

Having said this, in rise of around 250-odd points in NIFTY in last two session, the Markets have added, though nominal, in total open interest. The important thing is that it has not shed anything in Open Interest and thus, it can be fairly be concluded that even though there may be short covering, the same has been replaced in equal quantity of longs.

All and all, the Markets are likely to open on a decently positive note and trade positive, at least in the initial trade. However, we may see some consolidation / profit taking near the resistance levels mentioned and some volatility may be seen near these levels. It is advised to refrain from shorts and longs may be taken selectively, while equally protecting profits at higher levels. Overall, positive outlook is advised for today.

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

Monday, October 10, 2011

Daily Market Trend Guide -- Monday, October 10, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had an expected rally on Friday on back of favorable technicals and supported by positive global markets and ended the day with strong gains, and in the process formed a sharply higher top and higher bottom on the Daily High Low charts.

As mentioned in our previous editions of Daily Market Trend Guide, the Markets have been trading in a very broad rectangle, i.e. trading range of 4720-5170 and there had been no structural breach on the Charts and as a result, the rally was expected.

However, post this rally, the Markets still continue to remain in a trading range. For today, expect the Markets to open on a moderately positive note and look for directions. The Markets are likely to open on a positive note and continue with its up move at least in the initial session. For today, the levels of 4930 and 4970 shall act as resistance and the levels of 4850 and 4810 are likely to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 45.5940 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to trade above its signal line and is therefore bullish.

On the Weekly Chart, RSI is neutral at 37.4505 as it does not show any negative divergence or failure swing. The Weekly MACD still trades below its signal line. On the Candles Weekly Chart, A long lower shadow occurred which is usually potentially bullish under similar chart conditions. Further, the Markets have not shed but added nominal Open Interest in futures. It can be fairly observed that from Friday’s rally, there had been no net short covering which usually results in shedding of OI, but fresh longs have been created.

All and all, the Markets are likely to open positive, and trade positive at least in the initial trade. While protecting profits on initial positions, very selective fresh purchases may be made, while avoiding shorts. Volatility may remain. Overall, positive outlook is advised for today.