Gemstone Equity Research & Advisory Services

Monday, December 29, 2014

Daily Market Trend Guide -- Tuesday, December 30, 2014

MARKET REPORT December 30, 2014

Markets had a relatively stable session as it opened on a decently positive note but came of a bit to end with modest gains. The Markets saw a positive opening and after a buoyant opening the Markets moved in a sideways trajectory for the most part of the morning session. In the afternoon, the Markets saw some more strength coming it as it formed its intraday high of 8279.15. However, it never decisively broke its 50-DMA levels and it continued to resist. The second half of the session saw some paring of gains from the intraday high. The levels of 50-DMA continued to act as resistance and the Markets finally ended the day at 8246.30, posting a modest gain of 45.60 points or 0.56% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, DECEMBER 30, 2014

The analysis for the Markets continue to remain on similar lines as the Markets have continued to resist at its 50-DMA. The Markets may see a modestly positive opening again and may inch upward in the initial trade. The Markets have attempted to continue with its pullback as it has formed a higher top and higher bottom on the Daily Charts but the levels of 50-DMA would be crucial to watch out for.

The levels of 8272 and 8325 would act as immediate resistance for the Markets. The supports would come in at 8150 levels and then at its 100-DMA which is 8093.

The RSI—Relative Strength Index on the Daily Chart is 47.7073 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, the NIFTY January futures have added over 3.82 lakh shares or 1.85% in Open Interest. This shows some fresh buying has been seen in the Marketts.

Going by the trend and pattern analysis, the Markets saw a sharp correction from its lifetime high levels and went on to correct over 66% from its top. It touched an intraday low of 7961.35 on 17^th of December and has thus attempted a pullback from there. On its way up, the Markets have been resisting to its 50-DMA levels which is 8272 today. It would be necessary for the Markets to move past and trade above this level to continue with its pullback successfully.

Overall, the volumes are likely to continue to remain sedate due to holidays. However, the general trend is likely to remain intact and we might see gradual inching up of the Markets. In event of any downside, it is not expected be any major decline. It is advised to continue to make selective purchases while keeping adequate amount of liquidity. Stock specific and sectoral out performance is likely as well. Though we might see some ranged movements and some more resistance at current levels, the overall trend continue to remain intact.

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, December 28, 2014

Daily Market Trend Guide -- Monday, December 29, 2014

MARKET REPORT December 29, 2014

The Markets had a sedate session on Friday after a Christmas holiday as it spent the most part of the session in sideways trajectory but ended the day with modest gains. The Markets saw a positive opening and it soon formed its intraday high of 8234.55 in the early minutes of the trade. It soon pared its gains to trade flat near its previous close. It spent the most part of the session thereafter moving in a sideways trajectory moving in a very narrow range. It continued to hover in the 20-odd points range until the late afternoon trade. The Markets saw some upside towards the end of the session and finally settled the day at 8200.70, posting a modest gain of 26.60 points or 0.33% while forming a slightly lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR MONDAY, DECEMBER 29, 2014

The Markets are likely to see quiet to mildly positive opening again but overall, it is likely to continue with a sedate performance on lower volumes due to year-end holidays. The levels of 50-DMA would be important and it would be critically important for the Markets to move past the 50-DMA levels in order to continue with its pullback.

The levels of 8264 and 8290 would act as immediate resistance whereas the levels of 8150 and 8100 would act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 44.6264 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continues to remain bearish while trading below its signal line. On the Weekly Charts, the Weekly RSI is 58.4898 and this too remains neutral without showing any bullish or bearish divergence or any failure swings. The Weekly MACD too remains bearish while it trades above its signal line.

On the derivative front, NIFTY January futures have shed nominal Open Interest of over 1.47 lakh shares or 0.71%. This shows no major offloading was witnessed in the previous session.

Going by pattern analysis, there is no major breach on the Daily as well as Weekly Charts. The Markets have dipped below its 50-DMA and it will have to move past this level again in order to continue with its pullback. During the downside, there has been near-absent volumes. The lack lustre Markets are more due to lack of participation than due to weak technicals.

Overall, one can continue to make very selective purchases. The volumes are likely to continue to remain thin due to year-end holidays. However, given everything, the 50-DMA levels would continue to remain crucial and it would be important for the Markets to move past that level. While overall trend continuing to remain intact and with no major downside seen, positive caution is advised for the day.