Gemstone Equity Research & Advisory Services

Monday, February 27, 2012

Daily Market Trend Guide -- Monday, February 27, 2012

MARKET TREND FOR TODAY February 27, 2012

The corrective trend in the Markets continued on Friday on expected lines as Markets drifted after opening positive and ended the day with losses. The Markets opened on a positive note and gave its intraday high of 5521.40 in the early seconds of the trade. Thereafter, the Markets turned negative and transformed themselves into falling trajectory for the rest of the session. It continued to drift and gave its intraday low of 5405.90 coming off over 120-odd points from its day’s high. It finally ended the day at 5429.30, posting a net loss of 54 points or 0.98%. With this, the Markets have ended the week with net loss of 135 points or 2.43% and has formed a lower top and lower bottom on the Daily High Low Charts.

For today, technical charts point towards the correction continuing in the Markets. Today, expect the Markets to open on a moderately negative note and look for directions. All lead indicators too point towards continuing weakness and the intraday trajectory too would play a critical role in deciding the trend for the Markets today.

Today, the levels of 5460 and 5490 are likely to act as resistance and the levels of 5390 and 5325 are likely to act as supports.

The RSI—Relative Strength Index on the Daily Charts is 60.0321 and it has reached its lowest value in last 14-days which is Bearish. Also, RSI has set a new 14-day low where as NIFTY has not yet and this is BEARISH DIVERGENCE. On the Candles too, formations point towards continuing weakness. The Daily MACD has reported a negative crossover one day ago and thus trades below its signal line.

On the Weekly Charts, RSI remains neutral and Weekly MACD trades above its signal line.

Having said this, it can be fairly concluded that all indicators point towards continuation of correction. We may see some intraday sharp recoveries but correction in the Markets is likely to continue. Intraday trajectory would thus be important. Thus, it is advised to refrain from taking any fresh long positions on aggressive manner and purchases, if any, should be made on very selective basis while vigilantly protecting profits. 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

Tuesday, February 21, 2012

Daily Market Trend Guide -- Tuesday, February 21, 2012

MARKET TREND FOR TODAY February 21, 2012

The Markets continued to end the day with gains but showed some signs of weariness as it ended the day after coming off its highs. The Markets opened strong on Friday and gave its intraday high of 5606.70 and then continued to trade in a capped range until afternoon trade. The Markets pared much of its gains in the late afternoon trade and ended the day after coming off its highs at 5564.30, posting yet another moderate gain of 42.35 points or 0.77%. With this, it has formed a sharply higher top and higher bottom on the Daily High Low charts and has ended the week with net gains of 182.70 points or 3.37%.

For today, expect a quiet start in the Markets. The Markets are expected to open on a quiet note and are likely to consolidate. With the Markets coming off its highs on Friday and with a quiet and moderately lower start expected the levels of 5610 shall act as immediate top for the Markets and we have to see again if it corrects or consolidates here.

For today, the levels of 5580 and 5610 shall act as resistance and the support comes in at as slow as 5450 and 5410 levels.

All lead indicators continue to remain overbought. The RSI—Relative Strength Index on the Daily Chart is 78.3258 and continues to remain grossly overbought. It has reached its highest value in last 14-days and is bullish. However, it does not show any negative or positive divergence. The Daily MACD continues to trade above its signal line. On the Weekly Charts, the RSI is 61.4697 and that too has reached its highest value in last 14-weeks.

Having said this, it would be important to see that the Markets consolidates or corrects at these levels. This is because, whatever the weekly charts say, the Daily Charts are very much overstretched and the lead indicators are grossly overbought. Further to this, this is expiry week and we are also likely to see the Markets remaining dominated with rollover activities.

All and all, we continue to advice high degree of caution. The Markets behaviour on the upside has been quite erratic, the market breadth negative on Friday and with quiet start today, any unabated rally would get dangerous with each passing day and the correction would remain imminent and long overdue. Overall, cautious approach to the Markets advised for today with protection of profits at current levels.