Gemstone Equity Research & Advisory Services

Friday, April 20, 2012

Daily Market Trend Guide -- Friday, April 20, 2012

MARKET TREND FOR TODAY April 20, 2012

Positive consolidation continued in the Markets yesterday as the Markets ended 4^th day in a row with gains as it ended the day with moderate gains. The Markets opened mildly positive and after trading in a range, it dipped into the red to give intraday low of 5291.30. However, it recover from its lows to trade into the green as it formed a rising trajectory for itself. It again pared some of its gains but later recovered again to give the day’s high of 5342.35. It finally ended a range bound day at 5332.40 with posting moderate gains of 32.40 points or 0.61%. With this, it has form a Parallel Bar with the almost similar top and bottom on the Daily High Low Charts.

Today, again, expect the consolidation to continue in the Markets with the Markets expected to open on a lower note and then trade with possibilities to recover given the technicals, the Pattern Analysis and the F&O data. All point towards a consolidation, narrow and range bound movement with an upward bias today.

For today, the levels of 5368 and 5420 shall act as resistance and the levels of 5305 and 5260 are immediate supports on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 54.1464 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it trades above its signal line.

The levels of 50-DMA, which is 5337 today, has continue to act as resistance at Close. It would be imperative for the Markets to move past this levels after which it can encounter resistance around 5400-5420 levels. However, again, NIFTY Futures have added over 10 lakh shares in Open Interest and Stock Futures have added over 6 Crore shares in the Open Interest indicating slow, but steady build up of long positions. Also, the Pattern Analysis point towards immediate short term strength on the Charts with the smaller DMA rising to cut the larger DMA from below, indicating to give a positive crossover in next few sessions to come.

All and all, no indications as yet for a breakdown on Charts and no upward breakout as yet too..!! So, stock specific action to continue and any dip should be used to make very selective purchases and at the same time, profits should be vigilantly protected as it is being done this entire week. Overall, range bound movement with positive bias is expected for today. Cautiously positive outlook advised.

Milan Vaishnav,

Consulting Technical Analyst,

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Thursday, April 19, 2012

Daily Market Trend Guide -- Thursday, April 19, 2012

MARKET TREND FOR TODAY April 19, 2012

The Markets consolidated yesterday after Tuesday’s up move as it pared some of its gains after a positive opening and finally ended the day with moderate gains. The Markets opened positive following positive global cues, but gave its intraday high of 5342 in the morning trade itself. After opening positive, the Markets saw some low volume profit taking as it drifted and remained in slightly falling trajectory. It basically found resistance at the 50-DMA and after drifting for the entire session, bit by bit on low volumes, it finally ended the day at 5300, posting a minor gain of 10.30 points or 0.19%. In the process, it has formed a higher top and higher bottom on the Daily High Low Chart. At Close, the 50-DMA which is 5338 today, has acted as resistance.

Today, consolidation is expected to continue as the Markets are likely to open on flat to moderately positive note and look for directions. The intraday trajectory would be critically important, all lead indicators and F&O data point towards underlying trend remaining intact.

For today, the levels of 5338 and 5380 shall act as immediate resistance on the Charts and the levels of 5278 and 5240 shall act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 51.7928 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD, however, has reported a positive crossover and it now trades above its signal line and it is bullish.

The NIFTY Futures have added nearly 8 lakh shares in Open Interest and Stock Futures have added little over 3 crore shares in Open Interest. Nifty PCR stands at 1.12 with significant room on the upside.

Having said this, it is important to note that as we have been explaining in our previous editions, there is no breakout or breakdown on charts and the Markets continues to remain in a consolidation mode due to the reasons mentioned above. So, the conclusion is that the Markets do have a positive bias but has a statistical resistance at 5338 in form of 50-DMA and further in the range of 5400-5420 levels. So, until the Markets moves past these levels, we will keep seeing movements like that of yesterday due to profit taking activities, but still keeping the underlying trend intact.

All and all, it is advised to continue to remain stock specific while avoiding aggressive positions. Short should clearly be avoided. Any weakness should be used for selective stock picking, while continuing to protect profits at higher levels. Overall, cautiously positive approach is advised for today.