Gemstone Equity Research & Advisory Services

Wednesday, August 8, 2012

Daily Market Trend Guide -- Wednesday, August 08, 2012

MARKET TREND FOR TODAY August 8, 2012

The Markets had yet another decent session wherein it continued with its up move and ended the day with decent gains after a flat opening. The Markets opened on a quietly positive note and for the entire session, remained in positive rising trajectory as it kept gradually making new highs. The Markets went on to give its intraday high of 5350.10 towards the end of the session and ended the day at 5336.70, slightly off its highs but still posting decent gain of 54.15 points or 1.03%. The volumes continued to improve. It has made a sharply higher top and higher bottom on the Daily High Low Charts.

The Markets today, again are expected to open on a moderately positive note and look for directions but this time, it has closed near one of the Double Top resistance and has a near term resistance further ahead. So, key would be to see the intraday trajectory the Markets form and the behavior of the Markets vis-à-vis these two resistance levels.

Today, the levels of 5360 and 5398 would be the two pattern resistance levels that the Markets face and the behavior of the Markets vis-à-vis these two levels would be critical to see.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 63.3721 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. The Daily MACD continues to trade above its signal line.

The volumes have moderated in yesterday’s rise, with most of the Index and Sectoral Index components have traded either around the average volume or below it. Though NIFTY and Stocks have both continued to add in total open interest.

Going by this, it is likely that the Markets continues with its up move in the opening session. However, going by pattern analysis, it is important to note that at the same time, Markets would be near their pattern resistance shown in the Charts. There are chances that we see intermittent profit booking at higher levels and a mild correction is seen. It is thus advised to keep protecting profits at higher levels and remain ultra selective in taking fresh positions. Overall, positive caution 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, August 7, 2012

Daily Market Trend Guide -- Tuesday, August 07, 2012

MARKET TREND FOR TODAY August 7, 2012

After two days of brief consolidation on the Daily Charts, the Markets have again attempted a breakout on back of strong and favorable technicals fuelled by positive global cues as it ended the day with decent gains after opening on a strong note. The Markets opened on a strong and positive note and importantly maintained its gains throughout the session. After opening on a firm note, the Markets move sideward gradually adding gains as it gave its intraday high of 5293.20. The Markets kept moving in a 20-odd point range and it finally ended the day on a strong footing at 5282.55, posting a decent gain of 66.85 points or 1.28%. It has formed a sharply higher top and higher bottom on the Daily High Low Charts.

Today, after yesterday’s up move, a quiet opening in the Market is expected with the Markets opening flat and then are expected to consolidate again, looking for directions. The Markets have ended near a double top resistance, as evident from the Chart and it would be critical to see if they move up further or consolidate around these levels.

For today, the levels of 5285 and 5340 are expected to act as resistance and the levels of 5250 and 5210 are expected to act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 59.3156 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. The Daily MACD has reported a positive crossover and is bullish as it now trades above its signal line.

On the Candles, A Rising Window occurred. Such formation usually implies a continuation of the bullish trend.

The NIFTY and Stock Futures have continued to add in total Open Interest and the NIFTY PCR stands at 1.08 as against 1.11.

Overall, continuation of up move is expected but at the same time, some consolidation and minor profit taking too cannot be ruled out. It is advised to protect profits at higher levels and selective purchases should be done. However, aggressive positions should still be avoided. Balanced approach with caution and positive outlook is advised for today.