Gemstone Equity Research & Advisory Services

Monday, January 2, 2012

Daily Market Trend Guide -- Monday, January 02, 2012

MyMoneyPlant.co.in Wishes you all a Very Happy and Wealthy and Prosperous 2012

MARKET TREND FOR TODAY January 2, 2012

The Markets spent the last week of the Year 2011 on a very low volumes, remained directionless for the most part of the sessions during the day, and ended the last four out of five days with losses. On Friday too, the Markets, after trading with almost 1% gain, suddenly pared all of its gains to end the day at 4624.30, posting a loss of 21.95 points or 0.47%. With this, the Markets have ended the week with net loss of 89.70 points or 1.90%.

Today also, we can expect a total flat and directionless opening in the Markets. The Markets are expected to open on a flat note and thus continue to depend on the intraday trajectory it forms and also the volumes. Volumes would be critical for any up move because, they have been lower than average for the entire last week. Also, major global markets such as Hong Kong, Singapore, Japan and US are Closed today and this would certainly reflect domestic volumes too.

Further to this, the Daily and Weekly Charts continue to throw slightly contradictory signals and this would keep the Markets volatile and more or less directionless. But this contradiction has a bias towards up side. The RSI on the Daily Chart is 39.0160 and is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to be Bullish as it trades above its signal line.

On the Weekly Chart, the Weekly MACD is bearish as it trades below its signal line. But on the other hand, the Weekly RSI, which is 39.0412 shows a Bullish Divergence as the NIFTY has set a new 14-week low, but the RSI has not.

All and all, such conditions on the Charts are likely to keep the Markets overall volatile and directionless, but with a positive bias. Further, the volumes are certainly to remain a concern today and this may pose resistance to any sustainable upside or downside equally. Stock specific activity shall continue. Overall, it is advised to avoid aggressive positions on either side, especially on the short side and extremely selective stock specific purchases may be made while protecting profits at higher levels. Cautiously positive approach 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

Wednesday, December 21, 2011

Daily Market Trend Guide -- Wednesday, December 21, 2011

DAILY MARKET TREND GUIDE December 21, 2011

The Markets traded in line with the analysis carried out yesterday for the entire session, except that it suddenly fizzled out in the last 45 minutes of the trade to end yet another day of losses as it ended the day at 4544.20 down by 68.90 points or 1.49%. The Markets recovered some 50-odd points from its day’s low to trade flat but pared some 70-odd points from that levels to end the day with losses. In our yesterday’s edition, we had mentioned that given the technical indicators, the levels of 4555 would act as immediate support. That support held good until end of the session where it was temporarily broken. In the process, the Markets have formed a higher top and lower bottom as evident from the below chart. Thus, in the last nine sessions, NIFTY has shed 518.40 points or 10.70%.

Today, we can expect a long overdue pullback in the Markets. The European Markets have ended strong followed by strong consumer sentiment index in Germany and successful auction of Spanish bonds. The US too has rallied overnight and the Asian Markets are trading strong.

The Indian Markets too, which are nearly OVERSOLD and one of the worst performer among its peers is expected to give a gap up opening. It would be extremely important for the Markets to remain in positive rising trajectory post opening in order to capitalize on the positive opening. The levels of 4675 shall act as immediate resistance, the support (indicated with red line on the charts) which it broke. On the lower side, theoretically speaking, would be the levels of 4555.

The NIFTY added Open Interest yesterday, the OVERSOLD stock continued to get further OVERSOLD while adding Open Interest so the pullback that we would see would be imminent anyway, which would be supported by the buoyant global markets.

We refer our Monday’s edition of Daily Market Trend Guide wherein we had mentioned the Weekly Chart of the NIFTY and had mentioned that baring weakness for a day or two, the overall Week should not be that bad for the Markets and with today’s opening, we would neutralize this week losses, leaving the rest to the Markets to sustain. Also, as mentioned yesterday, even though the Markets continue to move further down, it has a potential for a sharp pullback, to the tune of 150-200 points, still remaining in overall downtrend and overall falling channel.

Thus, watching the intraday trajectory for the Markets which would be critically important, positive outlook is advised for today.