Gemstone Equity Research & Advisory Services

Thursday, January 5, 2012

Daily Market Trend Guide -- Thursday, January 05, 2012

MARKET TREND FOR TODAY January 5, 2012

The Markets yesterday traded almost very near to what it was analysed in our yesterday’s edition of Daily Market Trend Guide as it consolidated just below 4800 mark and then suddenly pared its gains towards the end to end the day with moderate losses. The Markets opened positive but soon dipped into the red. The Markets saw a sharp recovery in the afternoon trade, but in the last hour and half of trade, it pared all of its gains, recovered a bit again to finally end the day at 4749.65, posting a net loss of 15.65 points or 0.33%.

Today, expect the Markets to open flat and continue to consolidate. The levels of 4800 would still continue to act as temporary resistance until the Markets moves past it. Until this happens, it is likely to remain in a broad range of 4800 on the upper side and 4650 on the lower side. This is a broad range which is indicated with the red and black support lines on the Chart above. For any sustainable up move to occur, the Markets will have to move past the levels of 4800 and sustain above that.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 48.4079 and 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.

NIFTY has shown a very negligible decrease of 0.47% in Open Interest which should not be a factor to worry about. Majority of NIFTY components have either shown increase in open interest with the price rise or some amount of increase in OI even with the decrease in price indicating some creation of short positions.

All and all, the Markets may continue to consolidate in the opening trade and may look for directions. Both intraday trajectory and volumes shall be critical to decide the trend but at the same time the undercurrent remains bullish and the bias remains towards upside. Selective purchases may be made and at the same time, profits at higher levels should be protected until the Markets moves past the levels of 4800. Overall, 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

Wednesday, January 4, 2012

Daily Market Trend Guide -- Wednesday, January 04, 2012

MARKET TREND FOR TODAY January 4, 2012

The Markets saw a very stable and sustained up move yesterday as it opened expectedly positive and maintained its trajectory through out the session to end the day with robust gains. The Markets opened positive, went on to give intraday high of 4773.10, and ended the day near the high point of the day at 4765.30, posting a robust gain of 128.55 points or 2.77%. This was reflected across all sectoral indices too and in the process, the Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a positive note and continue with its up move at least in the initial trade. Technically, it is expected to continue with the up move as it has closed near the high point of the day. As always, due to little lower volumes, the intraday trajectory would continue to play crucial role in helping the trend to sustain.

As evident in the above chart, the level of 4795-4810 is the level which it broke earlier (the black support line drawn) is likely to act as resistance. Thus, for today, the levels of 4795 and 4835 are likely to act as resistance today.

All lead indicators continue to throw positive and bullish signals today. The RSI—Relative Strength Index on the Daily Chart is 49.3993 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has set a new 14-day high, whereas, NIFTY has not yet, and this is Bullish Divergence. The Daily MACD continues to trade above its signal line and is therefore bullish. On the Candles, A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles--this makes the current rising window even more bullish.

All and all, the under current remaining bullish. The Markets faces resistance around 4800 levels as mentioned above and are likely to consolidate around that level or may see minor profit taking even with the under current remaining buoyant. The Markets will have to move past the 4800 levels for further up move and there are chances that consolidation is seen. Overall, while protecting profits at higher levels, positive outlook may be maintained as bias still remains towards upside.