Gemstone Equity Research & Advisory Services

Tuesday, November 15, 2011

Daily Market Trend Guide -- Tuesday, November 15, 2011

MARKET TREND FOR TODAY

The Markets continued to reel under pressure for the third day in a row as it expectedly failed to maintain a positive trajectory after a strong opening and in the process, failed to capitalize on it as it ended the day with modest losses after paring all of its gains. In the process, the markets have formed higher top but lower bottom on the Daily High Low Charts.

For today, we have a critical session ahead as the trend and behavior of the Markets today shall not only decide the trend for today, but also for next couple of sessions to come.

For today, expect the Markets to open on a mildly negative note and look for directions. The Markets are expected to open flat and thus continue to critically depend upon the intraday trajectory that it shall form during the day and it would continue to remain critically important to decide the trend for today. For today, the levels of 5190 and 5230 shall act as resistance and the levels of 5110 and 5090 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 49.5363 and it has reached its lowest value in last 14-days which is bearish. Also, RSI has set a new 14-day low whereas NIFTY has not and this is bearish divergence. The Daily MACD continues to trade below its signal line.

On the other hand, on the Candles, A engulfing bearish pattern has occurred. When this occurs during a downtrend, which is the case with NIFTY, it indicates a bullish reversal. However, this need confirmation.

Along with the above reading, the Markets have shown significant addition of Open Interest across all stocks and NIFTY futures. This shows considerable addition of short positions which are likely to act as support on lower levels. Also, FIIs have remained net buyers and the volumes too have remained much on the lower side yesterday. All and all, this signifies that there will be discomfort at lower levels and we may expect some stability to return. Some amount of volatility may be seen. Selective, stock specific approach while avoiding shorts is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

www.MyMoneyPlant.co.in

+91-9825016331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Monday, November 14, 2011

Daily Market Trend Guide -- Monday, November 14, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had an disappointing session on Friday, and also a disappointing week as it ended the day as well as week with net losses which had just three trading days amid global uncertainties and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

Following overnight developments in the Europe, the Markets are likely to see a strong opening today. We can fairly expect to see strong opening in the Markets and the Markets are expected to trade strong, at least in the initial trade.

Technically speaking, the Markets have closed below its 100 DMA on the Daily Charts but is just within its filter. Further, the European Markets have see big recovery from its intraday lows on Friday and the US Markets have given good strong close and all this is expected to aid in stronger opening today. For today, the levels of 5220 and 5255 are likely to act as resistance and the levels of 5140 and 5110 are likely to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 51.0254 and has reached its lowest value in last 14-days which is bearish. RSI has set a new 14-period low whereas NIFTY has not and this is bearish divergence. Also the MACD has turned negative as it has reported a negative crossover and trades below its signal line.

However, on the Weekly Charts, RSI is 47.71.70 and its neutral without any negative divergence or failure swing. The MACD continues to remain bullish trading above its signal line.

Having said this, strong positive opening can certainly be expected but at the same time, it would be critically important for the Markets to remain in positive trajectory in order to capitalize on its positive opening. NIFTY has reported shedding of Opening Interest and this needs to be replaced with fresh buying.

All and all, intraday trajectory would be critical to see if Markets is able to capitalize on stronger opening today. With overall technicals and lead indicators in place, it is advised to refrain from shorting and stock specific positions may be taken, Overall, cautious optimism is advised.