Gemstone Equity Research & Advisory Services

Tuesday, March 3, 2015

Daily Market Trend Guide -- Tuesday, March 03, 2015

MARKET REPORT March 03, 2015

Markets continued to post gains yesterday as well but while doing so continued to encounter good amount of volatility as well. The Markets saw a positive opening yesterday and after opening positive went further ahead while forming day’s high of 8972.35. However, post morning trade, the Markets saw some amount of profit taking coming in as it shed all of its morning gains gradually to trade flat. It also dipped briefly into the negative territory forming the day’s low of 8885.45. The Markets traded in a capped range in the afternoon trade without any directional bias. The later part of the session once again saw recovery coming in as the Markets recouped much of its early losses. It went up almost near to its intraday high but finally settled the day at 8956.75, posting a net gain of 54.90 points or 0.62% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 03, 2015

The Markets are expected to open on a quiet note and faces two-fold possibility today. There are chances that they may attempt to continue its up move and move towards the psychological mark of 9000 and at the same time they continue to remain vulnerable to good amount of volatility and profit taking from higher levels. The Markets now enter a crucial stage wherein they would attempt to touch their life time highs and at the same time might also resort to profit taking as well.

The levels of 8985 and 9040 would act as immediate resistance for the Markets. The supports would exist at 8880 and 8750 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.8821 and it does not show any failure swing. However, NIFTY has continued to post fresh 14-period high but RSI has not yet and this is Bearish Divergence. The Daily MACD has now reported a positive crossover and it is now bullish trading above its signal line.

On the derivative front, the NIFTY March futures have added over 8.73 lakh shares or 3.40% in Open Interest. This is positive indicator signifying the continuation of creation of fresh longs in the system.

While having a look at pattern analysis, the Markets have continued to move towards its life time highs and it is likely that it would continue to do so today as well. There are chances that the Markets attempts to continue with its up move but at the same time, as we had mentioned in our yesterday’s edition of Daily Market Trend Guide, it would be still far from what is known as a “break out” because of ever-rising upper trend line. Therefore, even if it moves towards its highs, it would continue to remain prone to high volatility and profit taking from higher levels.

Overall, it is advised to continue to remain heavily cautious while making fresh purchases. The Markets still has some steam left to not only move towards its life time highs but post fresh lifetime highs as well. However given the technical structure and given the lead indicators, it is advised to continue to keep over all exposure at moderate levels and keeping fresh purchases highly selective.

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

Monday, March 2, 2015

Daily Market Trend Guide -- Monday, March 02, 2015

MARKET REPORT March 02, 2015

Markets had a horrifying session on Saturday while it dealt with the first full Budget from the present government and it swung nearly 190-odd points on either side, that too for multiple times before ending the day with modest gains. The Markets saw a near gap up opening on Saturday and while it approached the Budget, it saw gradual paring of its morning gains. Wild reactions and swing started as the proposals start pouring in. Markets, while trying to digest the budget, swung violently on either sides and at one point of time came off nearly 190-odd points from the high point of the day, which was 8941.10, to touch the day’s low of 8751.35. The final hour of the trade saw equally violent and volatile recovery from the low point of the day and it finally settled the day at 8901.85 posting a modest gain of 57.25 points or 0.65% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, MARCH 02, 2015

The Markets shall open today after a greatly violent and volatile session on Saturday while reacting to Budget proposals. However, today, we are again likely to see a gap up opening and the Markets are expected to open on a decently positive note. However, at the same time, it is important to note that even if the Markets opens on a strong and positive note, it is likely that the Markets remains within a rising trend line as evident on the Daily Chart. Therefore, the intraday trajectory that the Markets form post opening would be crucial.

The levels of 8950 and 9060 would act as immediate resistance for the Markets. The supports would come in at 8830 and 8750 levels.

The RSI—Relative Strength Index on the Daily Chart is 61.3861 and it shows no failure swing. However, the NIFTY has formed a fresh 14-day high while the RSI has not and this is Bearish Divergence. The Daily MACD still continues to remain bearish trading below its signal line. On the Weekly Charts, Weekly RSI is 68.5577 and shows no failure swing. However, NIFTY has formed a fresh 14-week high but RSI has not and this shows Bearish Divergence as well. The Weekly MACD continues to trade above its signal line and is therefore bullish.

On the derivative front, NIFTY March futures have added over 15.17 lakh shares or 6.27% in Open Interest. This very clearly shows that fresh buying has been done and the rise that occurred in the second half of the session was not merely due to short covering.

Coming to pattern analysis now, it is very important to take note of few important things.

Even if the Markets see a gap up opening and touches the psychological mark of 9000; or while doing so, posts a fresh life time highs, it will NOT be giving any fresh breakouts. It is very much likely that it continues to remain within the upper rising trend line. Though it may continue to remain in overall rising trajectory, fresh lifetime highs should not be taken as fresh breakouts. Therefore, again, in such case, consolidation from higher levels cannot be ruled out.

Overall, keeping in view the overall structure of the Charts, the Markets may open positive and continue with its up move but since it would be far from achieving a break out, it would walk towards its pattern resistance of upper rising trend line. Given this fact, it is advised to use all the up moves that occur to reduce positions or book and protect profits on existing positions while taking fresh exposures very selectively.