Gemstone Equity Research & Advisory Services

Monday, November 28, 2011

Daily Market Trend Guide -- Monday, November 28, 2011 (Published in the Morning before the Markets opened)

MARKET TREND FOR TODAY November 28, 2011

We had categorically mentioned in our Friday’s edition of Daily Market Trend Guide that the levels of 4780 would be critical as the Markets will have to move past them in order to re-enter the broad trading range and avoid further weakness. Also, along with that we had mentioned that the levels of 4720 would be equally critical and the markets will have to ensure that it trades above that to avoid weakness. The Markets did so for the most of the trading session, but finally ended the day notch below it at 4710.05 ending the day with loss of 46.40 points. With this, the Markets ended the week with net loss of 195.75 points or 4% and in the process formed a Similar Top but higher bottom on the Daily High Low Charts.

Technically speaking, it would be critical for the Markets to open above 4720 to avoid any weakness. This is likely as Friday’s session witnessed very low volumes relatively and today’s with the global scenario remaining positive, we are likely to see a positive opening today.

Thus, expect the Markets to open on a positive note today and look for directions. For today, the levels of 4720 and 4680 shall act as support on the lower side and on the upper side, the levels of 4780 shall continue to act as immediate resistance. As mentioned on Friday, the markets will have to move past the levels of 4780 in order to avoid any weakness.

The RSI—Relative Strength Index on the Daily Chart is 30.9593 and is neutral as it shows no negative divergence or failure swing. But it has move out of its Oversold range and thus, this is bullish. The Daily MACD still continues to trade below its signal line.

On the Weekly Charts, the RSI is 37.2604 and it does not show any failure swing. However, NIFTY has set a new 14-week low but the RSI has not and this is BULLISH Divergence. The Weekly MACD on the other had has reported a bearish signal as it has given a negative crossover and now trades below its signal line.

Given the above reading, it is extremely critical for the Markets to, firstly, maintain the levels above of 4720 to avoid any kind of further weakness. Secondly, it will have to move past the levels of 4780 so that it is able to move back into the broad trading range and this would mean that the Markets are under no negative breach as on immediate basis.

Thus, until this happens, we are likely to see volatile movements in the range of 4720-4780 and the intraday trajectory would be crucial. However, given the lead indicators, the bias remains positive. Over all, cautious optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Friday, November 25, 2011

Daily Market Trend Guide -- Friday, November 25, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY 

The Markets yesterday saw a much awaited and long overdue technical pullback as it ended the day with modest gains. The Markets opened weak yesterday and after touching the low of 4639.10, rose over 130-odd points from they days low to end the day at 4756.15, posting a decent gain of 50 points or 1.06%. In the process, the Markets have formed a parallel bar with similar top and bottom on the Daily High Low Charts.

For today, expect a subdued opening in the Markets and today’s session would be critical for the Markets to decide the trend for coming weeks. Today, expect the Markets to open on a subdued note with the levels of 4780 and 4845 acting as resistance levels and the levels of 4720 and 4680 acting a crucial support levels. The RSI—Relative Strength Index on the Daily Charts is 32.8289 and it has crossed above its OVERSOLD formation which is Bullish. It does not show any negative divergence or failure swing. The Daily MACD continues to remain bearish as it trades below its signal line. On the Candles, A While Body occurred as the prices closed quite higher than they opened. 

Today’s trend would continue to critically depend on the behaviour of the Markets vis-à-vis the levels of 4780. The 4780 levels continue to remain a critical support before 4720 levels (which is currently likely to act as resistance until markets moves past the levels of 4780). It would be imperative for the Markets to move past this levels as soon as it can so that it can re-enter the broad trading range of 4720-5170 it traded in for almost two months. Until it moves past 4780 levels, it may accumulate with slight downward risk with the levels of 4720-4680 acting as supports.

All and all, the volumes have been good and there continues to be large rollovers of short positions yesterday and there are chances that we may see the Markets move past this level of 4780. For this, maintenance of levels of above 4720 would be critical. There are chances that after a subdued opening we may see the trend improving as the session progresses. However, a dip below 4720 will infuse some weakness in the Markets. While stock specific purchases may be seen, cautious approach is continued to be advised for the day.