Gemstone Equity Research & Advisory Services

Thursday, March 19, 2015

Daily Market Trend Guide -- Wednesday, March 18, 2015

MARKET REPORT March 18, 2015

Volatility continued to persist in the Markets as the Markets saw swings on either side before ending the day with decent gains on back of sharp short covering in the last hour of the trade. The Markets saw a modestly positive opening and it saw some more strength in the late morning trade as the Markets formed its intraday high of 8742.55. It flattened its trajectory for a brief period and the afternoon trade saw a steady paring of morning gains. At one point of time the Markets pared all of its gains to trade absolutely while forming the day’s low of 8630.80 coming off nearly 100-odd points from high point of the day. However, the last hour of the trade saw equally sharp short covering from lower levels. The Markets saw a near parabolic rise and it recouped most of its afternoon losses. It finally ended the day at 8723.30, posting a net gain of 90.15 points or 1.04% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MARCH 18, 2015

Expect the Markets to open on a modestly positive note and look for directions. The support zone of 8620-8660 has held out as good support levels for the Markets and this would continue to be important support zone for the Markets in intermediate short term as well. It would be important to see the intraday trajectory that the Markets forms post opening which would dominate the trend for the day.

The levels of 8790 and 8845 would act as resistance for the Markets. The supports come in at 8630 and 8600 levels.

The RSI—Relative Strength Index on the Daily Chart is 48.4533 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bearish trading below its signal line.

On the derivative front, the NIFTY March futures have shed over 8.54 lakh shares or 3.42% in Open Interest. Though this very distinctly shows short covering from lower levels, and it can also be interpreted as validating the support zone as well. NIFTY PCR stands at 0.91.

Coming to pattern analysis, the Markets have managed to hang on above the support zone of 8620-8660 and its filter. This support zone would continue to remain an important support zone as any breach below this level and its filter will see the Markets facing some more weakness in the immediate short term. So long as the Markets continue to remain above this zone, it would continue to see consolidation and would keep its overall trend intact.

All and all, though the Markets have managed to remain above its important support levels, it is not completely out of the woods as yet. It needs to move past the levels of 8920 and remain above that to resume its up move. Until that happens it would continue to remain in a very broad trading range and consolidation zone. While continuing to keep overall exposure at modest levels, selective 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

Daily Market Trend Guide -- Monday, March 16, 2015

Daily Market Trend Guide Monday, 16 March 2015

MARKET REPORT March 13 2015

As expected by the most, the Market in previous trading session on Friday 13^th March opened on a positive and firm note. The Market gained 73 points and went on to register intraday high of 8849.75 in the first hour of trading.

This intraday high, which was achieved early in the day, was the level, which fell within the expected and foretold strong resistance range. And immediately registering this intraday high, the market started encountering strong resistance and heavy selling.

The bout of profit booking and selling was much sharper than expected and the market never recovered from this for the rest of the trading session and finally closed at 8647 with damage of 128 points on Nifty.

MARKET TREND FOR FRIDAY, 16 March 2015

In the Friday March 13 edition of Daily Market Trend Guide, it was mentioned that Important resistance exists at 8792 ( 20 Day EMA) and 8871 ( Pattern ) and intraday, with supports at the 50 Day Simple and Exponential Averages ( at Close levels ) , which are 8658 and 8677 range. .

Likewise, the market in spite of all positive clues, failed to move beyond 8849.75 intraday and encountered heavy selling pressure, but the all important expected support of 8644 ( Pattern ) was not breached . The intraday low was 8631, which was not much below the expected range of 8658 – 8677.

The resistance was expected as stated, but the selling bout was much sharper then expected . What was expected in a few trading day, was witnessed in a day, and the market which saw heavy volatility of 218 points Nifty, gave a tall intraday bar on Daily High Low charts of Nifty touch both resistances and supports in a day.

Pattern Analysis indicate that for today and rest of the week, the range of 8644 ( Pattern ) and 8665 ( 50 Day Simple Moving Average) as of today, has become very decisive range.

On Candle charts, the engulfing bearish pattern occurs during a downtrend it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle's real body. The MACD is bearish since it is trading below its signal line.The MACD crossed below its signal line 4 trading days ago. The RSI has just reached its lowest value in the last 14 periods. This is bearish and its is a Failure Swing.

This technical analysis indicates that the markets are still not out of woods. Expect bouts of selling at every rise.

Today markets are expected to open on a flat to weak note.

Today, If the market opens above this range and manages to hang on above this range, this range will act as important support levels for the day. On down side, if the Markets breach these levels, it should find support at 8560 – 8535 range as indicated by Pattern Analysis.

Until the markets move above these decisive and all important range, weakness is expected and this is applicable today and for the rest of the week.