Gemstone Equity Research & Advisory Services

Monday, October 27, 2014

Daily Market Trend Guide -- Tuesday, October 28, 2014

MARKET REPORT October 27, 2014

The Markets had a session very much on expected lines as it opened positive but ended the day on a lower note while consolidating after couple of days of gains. The Markets opened positive and in the morning trade itself formed its intraday high of 8064.40. Thereafter, the Markets pared whatever modest gains it had in the morning session to trade absolutely flat. The Markets never made any headway nor did it lose ground until most part of afternoon trade as well as it traded flat and in a extremely capped range. It was only in the late afternoon trade that the Markets pared some of its weight. It slipped litter further and went on to form the day’s low of 7985.65. Markets finally ended the day at 7991.70, posting a nominal loss of 22.85 points or 0.29% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR Tuesday, 28 October 2014

The Markets are likely to trade on similar lines and we are likely to see a session once again in a capped range with some amount of volatility. The Markets are expected to open flat and look for directions. There are chances that it might consolidate and also remain dominated with some rollover activities. Though no sharp weakness expected but range bound session cannot be ruled out.

The levels of 8064 and 8090 would act as resistance and the levels of 7946 and 7910 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 54.3025 and it remains neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD remains bullish while trading above its signal line.

On the derivative front, the NIFTY October futures have shed over 9.94 lakh shares or 5.86% in Open Interest. However, this figure, if read singularly, will not be of much use as we have expiry coming up and rollovers have already begun.

Going by pattern analysis, the Markets, as mentioned yesterday, continue to remain in broad trading range. Any downside would see the support at its 50-DMA. So long as Markets trade above 50-DMA, it would just consolidate in a capped range with upward bias. Only a dip below its 50-DMA would induce some short term weakness in the Markets.

Overall, until the Markets consolidates and does not show a clear directional bias, it is strongly advised to use any up moves primarily for protecting profits at higher levels. Purchases should be made, but only stock / sector specific with high vigilance at higher levels. Overall, with the Markets likely to have sideways directional bias, only stock specific and cautiously optimistic approach is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Sunday, October 26, 2014

Daily Market Trend Guide -- Monday, October 27, 2014

MARKET REPORT October 23, 2014

The Markets traded for a Mahurat session on Thursday, 23^rd of October for an hour and spent the hour of the trade on expected lines. The Markets saw a positive opening and after opening in the positive, the Markets traded for entire hour in a sideways trajectory. In the first quarter of the hour of trade, the Markets touched the day’s high of 8031.75. Thereafter, after spending the rest of the time in a sideways trajectory, it came off a bit from those levels. The Markets finally ended the day at 8014.55, posting a net gain of 18.65 points or 0.23% while forming yet another higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, OCTOBER 27, 2014

The Markets have formed minor gaps in the previous two sessions and this may act in either way so far as Markets performance is concerned. It can either lend technical strength to the Markets, or may cause the Markets to consolidate in order to fill those gaps. However, with the global markets stable, we can expect a positive opening in the Markets initially but at the same time cannot rule out the possibility of some consolidation in immediate short term.

The levels of 8045 and 8080 would act as resistance and the levels of 7974 and 7940 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 56.0749 and it has reached its highest value in last 14-days which is bullish. Though it does not show any bullish or bearish divergences. The Daily MACD is bullish as it trades above its signal line. A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 11 rising windows in the last 50 candles--this makes the current rising window even more bullish. However, the formation of such candle can be attributed to a very short session of trade. On the Weekly Charts, the Weekly RSI is 64.2845 and it remains neutral without showing any bullish or bearish divergences or any failure swing. The Weekly MACD remains bearish while trading below its signal line.

On the derivative front, the NIFTY October futures have shed over 1.47 lakh shares or 0.86% in Open Interest. In the coming week, this standalone figure would be of little use as it would be a expiry week and rollovers would begin across segments.

Coming to pattern analysis, the Markets continue to remain in a broad trading range. It has taken support on 100-DMA twice and on Thursday, also attempted to move past the levels of 50-DMA. In event of any consolidation, the levels of 50-DMA should act as support at Close. Reading the Daily Charts along with the Weekly Charts, there are fair chances that the Markets continue to remain in a broad trading range while consolidating with some amount of volatility ingrained in it.

Overall, Markets may witness some ranged movement and might also see some profit taking from higher levels. Any up move should be continued to be utilized to protect profits. Stock specific purchases may be made as secotoral rotation and out performance would continue. Positive outlook with a tinge of caution is advised for the day.