Gemstone Equity Research & Advisory Services

Tuesday, January 24, 2012

Daily Market Trend Guide -- Tuesday, January 24, 2012

MARKET TREND FOR TODAY January 24, 2012

The session yesterday remain precisely as analysed as the Markets consolidated near the mentioned resistance levels and ended the day flat. The Markets opened on a negative note but soon moved into the positive territory and gave its intraday high of 5059.55. Thereafter, it spent the entire session in a very capped and narrow range and in between kept moving in and out of the positive territory. The Markets spent the entire session in a consolidating sideward movement and finally ended the day at 5046.25, posting a net loss of 2.35 points or 0.05%. In the process, it formed a parallel bar on the Daily High Low Charts, forming a similar top and similar bottom.

For today, we can expect the consolidation to continue and thus, the analysis for today remains more or less similar to what was carried out yesterday. For today, expect the Markets to open on a mildly positive note and look for directions. It is expected to open mildly positive and trade in a capped range, at least in the initial trade.

Today, RBI is set to announce its Monetary Policy and the Markets shall react to that. The overall Markets remain divided on the CRR cuts and thus, we may see the Markets reacting sharply to it either way, though there are equal chances of it remaining a non-event. Further to this, just two sessions remain for expiry and thus, we would also see the session dominated with rollover centric activities today also.

For today, the levels of 5100 remains an important resistance and the supports are expected at 5010 and 4970 levels. The RSI—Relative Strength Index is 67.99 on the Daily Charts and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trades above the signal line.

As indicated above, the rollover centric activities to continue. Both NIFTY and Key Stocks have reported rollovers in excess of 50% so far and the NIFTY PCR remains at 1.61. Any upside in the NIFTY will make it nearly overbought and this keeps the broad analysis similar to that of yesterday. It is advised to avoid aggressive exposure on either side and continue to protect profits. Even though in case of any positive surprise with CRR cut, it is still advised to avoid aggressive long positions and protect profits at higher levels. Overall, cautious outlook 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

Monday, January 23, 2012

Daily Market Trend Guide -- Monday, January 23, 2012

MARKET TREND FOR TODAY January 23, 2012

The Markets continued with its up move in the half hour of the day it saw a very sharp pullback from its day’s low to end the day with gains. The Markets opened on a positive note, but as expected in our previous edition of Daily Market Trend Guide, it formed a falling trajectory after initially trading in a capped range. In the second half of the day, it slipped from its positive territory and went on to trade in the red. It also gave its intraday low of 5004.30. However, in the last half hour of the trade, it saw a very sharp pullback on short covering as it not only gave the day’s high of 5064.15, but ended the day at 5048.60, posting a gain of 30.20 points or 0.60%. The Markets went on to form a higher top and higher bottom on the Daily High Low Charts. With this, the Markets have ended the week with net gains of 182.60 points or 3.71%.

This week, we are likely to see Markets taking a breather from last two weeks of very nice performance.

For today, expect a sedate and quiet start to the Markets. Barring India and Japan, rest of the five Markets, i.e. Taiwan, Hong Kong, Singapore, Korea and China are shut due to lunar new year. To add to this, we have Thursday as a holiday due to Republic day and thus, all this is likely to keep the Markets sedate and quiet on low volumes. For today, the levels of 5075 and 5090 are likely to act as resistance and the levels of 5005 and 4960 are immediate support on the Charts. The RSI – Relative Strength Index on the Daily Chart is 68.2834 and it has reached its highest value in last 14-days which is bullish. It does not show any positive or negative divergence. The Daily MACD continues to remain bullish as it trades above its signal line.

On the Weekly Charts, the RSI is 50.6660 and is neutral as it shows no negative divergence or failure swings. The levels of 5100 continues to act as resistance on the Weekly Charts. The Weekly MACD has turned bullish as it has reported a positive crossover.

Given the above reading, it can be fairly concluded that the Markets may not see very sharp correction, but they are likely to see some consolidation or some profit taking in the immediate term, while keeping its overall trend intact. This is likely to keep this truncated week little low on volumes, range bound and also bit volatile. Also, this being rollover week, with one day less, (Thursday being a holiday), we may see the sessions dominated with rollover centric activities.

All and all, the trend remains intact, but consolidation and mild profit taking cannot be ruled out. Purchases may be made, but very selectively and it has become all the more important to protect long profits at higher levels. Overall, cautiously positive outlook is advised for today.