Gemstone Equity Research & Advisory Services

Thursday, February 6, 2014

Daily Market Trend Guide -- Thursday, February 06, 2014

MARKET REPORT February 06, 2014

The Markets had a session similar to that of Tuesday as it opened lower but recovered during the day to end the day in green and also it held on to the support of 200-DMA for the second time after testing it. The Markets opened on a modestly negative note on expected lines and soon slipped to the lowest level of the day while it formed its intraday low of 5962.05 in the early morning trade. The Markets spent some time until early afternoon trade trading in a very capped range in the negative territory. By afternoon, the Markets managed to recover from its lows to trade near its previous close. The second half of the session saw the markets crawling higher into the positive territory as it gave its intraday high of 6028.05. The Markets finally ended the day at 6022.40, posting a net gain of 21.50 points or 0.36% while forming a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, expect the Markets to open on a flat to modestly positive note and look for directions. The Markets are expected to continue with its up move at least in the initial session. The Markets have held on to the support of 200-DMA at Close levels and are attempting a trend reversal. The intraday trajectory and the volumes would continue to play a critical role in this.

The levels of 6045 and 6080 would act as immediate resistance levels whereas the levels of 5976, the 200-DMA would continue to act as major support at Close levels.

The RSI—Relative Strength Index on the daily chart is 34.53 and it is neutral without showing a failure swings or any bullish or bearish divergences. The Daily MACD still remains bearish as it continues to trade below its signal line.

On the derivative front, the NIFTY February futures have added over 1.36 lakh shares or 0.84% in open interest. This signifies that exactly like day before, the rise in the Markets have seen some more fresh buying and not just short covering. This continues to remain a positive indicator. The NIFTY PCR stands at 1.11 as against 1.08.

Having said this, going by the pattern analysis, the Markets have held on to the support of 200DMA at Close levels. Any intraday dip below this level have seen recovery coming in. The Markets are attempting to reverse its trend. This attempt might see the Markets moving towards its 100-dma but it will require consistent higher top and higher bottom formations with volumes to successfully attempt a trend reversal.

All and all, we continue to advice to remain light on the positions and avoid aggressive positions. Any profits on either side should be protected and liquidity should be preserved. Very selective purchases may be made. Overall, very selective stock specific purpose with mild 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, February 5, 2014

Daily Market Trend Guide -- Wednesday, February 05, 2014

MARKET REPORT February 05, 2014

The Markets fared out exactly as analysed in our yesterday’s edition of Daily Market Trend Guide as it saw a gap down opening following global weakness and dipped below its 200-DMA intraday. However, this levels continued to hold as support as Close levels as the Markets recovered during the day to end the day above 200-DMA. The Markets opened on a gap down and soon formed its intraday low of 5933.30 in the early minutes of the trade. However, the Markets attempted to form a upward rising trajectory, though it continued to trade in a range until afternoon trade. It saw a sharper recovery coming in the second half of the session wherein the Markets recovered all of its losses. It even traded in the positive territory as it went on to form the day’s high of 6017.80 rising over 80-odd points from its day’s low. It finally ended the day flat at 6000.90, posting a net loss of just 0.90 points or 0.01% forming a lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today’s analysis continue to remain on the similar lines like yesterday. Today, we are expected to see a flat to mildly negative and quiet opening and the Markets are again likely to hover around its 200-DMA. It is likely that the Markets consolidate a bit and attempts to find bottom around this levels. The intraday trajectory and the behaviour vis-à-vis the levels of 200-DMA would continue to remain crucial.

Today, the levels of 6045 and 6080 would as immediate resistance on the Charts whereas the levels of 5975 and 5930 would act as support.

The RSI—Relative Strength Index on the Daily Chart is 31.6784 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergences. The Daily MACD continues to trade below its signal line.

On the derivative front, the NIFTY February futures have added over 1.95 lakh shares or over 1.22% in open interest. This figure clearly shows that the rise of over 80-odd points that we saw yesterday from the lows of the day was just not merely on account of short covering. It has seen some fresh buying as well which is clearly a positive indication.

Having said this, though the Markets are likely to see a subdued opening, the chances of it maintaining the levels above of 200-dma are very bright and the Markets are very likely to attempt a trend reversal from these levels.

All and all, we continue to reiterate the analysis reading given yesterday. The Markets are attempting hard to find a bottom and reverse the trend. It is advised to continue / begin making fresh purchases on a very selective note while maintaining adequate liquidity and protecting profits at higher levels. Overall, positive outlook with a tinge of caution is advised for today.