Gemstone Equity Research & Advisory Services

Wednesday, July 23, 2014

Daily Market Trend Guide -- Wednesday, July 23, 2014

MARKET REPORT July 23, 2014

The Markets inched up for the sixth day in a row and end the days yesterday with decent gains and also attempted to break out of the trading range. The Markets saw a modestly positive opening following stable global trend and traded in a capped range in the initial trade. The first half of the trading saw the Markets maintaining its levels above of 7700 and it continued to trade sideways while maintaining those levels. The Markets lost some ground in second half of the session but saw the strength returning in the final hour and half of the trade. The Markets went on to post the day’s high of 7773.85 and finally ended the day at 7767.85, posting a net gain of 83.65 points or 1.09% while forming a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

As evident from the Daily Chart, the Markets have attempted a breakout once again above 7700 levels. Today as well, we are set to see a positive opening and the Markets are likely to continue with its up move in the initial trade. Today’s opening would take the Markets near to 7809 level, which it its previous top. It would be critical to see the behaviour of the Markets as against that level.

For today, the levels of 7809-7820 would act as immediate resistance. The supports would exist at 7700 and 7620 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.0237 and it is neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD has reported a positive crossover and it now trades above its signal line and is bullish.

On the derivative front, the NIFTY July futures have added over 13.89 lakh shares or 9.26% in Open Interest. This is a clear indication that fresh longs have been created in yesterday’s session and there had been clear consensus while being on the upside.

Going by the pattern analysis, as evident from the Daily Charts, the Markets have attempted to break out on the upside from its broad trading range of 7500-7710 and today it is likely to continue its up move in the initial trade. However, the Markets will now face resistance against its immediate previous top of 7809 levels. It would be critically important to see whether the Markets moves past this level or facing some profit taking. Intraday trajectory of the Markets would be critically important as well.

All and all, we are set to see buoyant opening today and the Markets are likely to test its previous top of 7809 levels. However, given this fact, we continue to once again sound caution as it is likely that the Markets faces a bout of profit taking near its previous highs. Select stocks shall clearly outperform but it is extremely and critically important that we continue to protect profits at higher levels. Overall, cautious 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

Tuesday, July 22, 2014

Daily Market Trend Guide -- Tuesday, July 22, 2014

MARKET REPORT July 22, 2014

The Markets traded yesterday precisely on the analysed lines as the levels of 7700 continued to pose immediate resistance for the Markets. The Markets opened positive on back of positive global cues and also attempted to move past the levels of 7700. In the morning trade, the markets formed an intraday high of 7722.10. However, after trading with gains around this level, the Markets started paring of its gains. It spent rest of the session in slowly and gradually coming off from the intraday highs. By end of the session, it pared nearly bulk of its gains while forming the day’s low of 7674. The Markets deliberated around these levels and finally managed to end the day at 7684.20, posting a net gain of 20.30 points or 0.26% while continuing to form a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Though the Markets have ended with gains for fifth day in a row, the today’s session is all set to remain more or less on similar lines that of yesterday. Today, the Markets are likely to open again with modest gains and the opening levels would see the Markets once again around 7700 levels. The behaviour of the Markets after opening vis-à-vis the levels of 7700 would continue to remain critical to decide the trend for today.

For today, the levels of 7700-7710 and 7745 would act as resistance and the supports would come in much lower at 7610 and 7540 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.34 and it continues to remain neutral without showing any bullish or bearish divergences or any failure swings. The Daily MACD too continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY July futures have shed 13,500 shares or nominal 0.09% of Open Interest. Stock futures too have witnessed a very nominal decline in over all Open Interest. The NIFTY PCR stands unchanged at 0.87.

Pattern analysis clearly suggests what we have often repeated in our previous editions of Daily Market Trend Guide. The levels of 7700 have continued to pose immediate resistance for the Markets and the Markets shall try and reach out to its immediate top of 7809 only if it moves past the level of 7700. There are chances that we see some profit taking coming in a gain around 7700 levels as that is a immediate resistance for the Markets and the upper band of the broad trading range that the Markets have been trading in recent past.

Overall, the behaviour of the Markets post opening around 7700 would be critical. There are chances that the Markets find some resistance near these levels and see some intermittent bouts of profit taking. However, stock specific action would continue and volatility would stay. It is advised to limit fresh purchases while continuing to protect profits at higher levels. Overall, cautious outlook is continued to be advised for today.