Gemstone Equity Research & Advisory Services

Sunday, April 5, 2015

Daily Market Trend Guide -- Wednesday, March 25, 2015

Daily Market Trend Guide March 25, 2015

MARKET REPORT

The Market yesterday opened more or less flat and turned positive immediately in the initial hours of trade and remained in the positive trajectory till mid of the trading session. Thereafter, the markets started encountering mild selling pressure around noon. This dragged the market , slowly but steadily near to the previous close and also briefly into red. Immediately thereafter, market witnessed sharp up move, which was met with equally sharp downward pressure . In the afternoon trades, market saw very choppy session. Markets witnessed sharp and sudden offloading in the last hour of trade. Towards the end of the session, Two days ahead, volatility was seen due to March expiry .

In spite of the sharp volatility, markets traded precisely in the range foretold- 8644 as resistance at upper levels, with supports in the range of 8508 – 8520. The market gave intraday high of 8627 and intraday low of 8535.

MARKET TREND FOR WEDNESDAY, MARCH 25 2015

Since the start of expected correction, the markets have behaved and remained in the foretold and expected range. It was mentioned in yesterday’s Daily Market Trend Guide that It remains to be seen, whether important supports are breached or markets takes support at these levels and correction takes a breather.

Likewise, market did test the important support range, but no downward breakdown was seen, even in a very volatile session towards the end.

However, Technical Analysis of Daily High Low Chart reveals that even though markets have not downward breached these important support levels of Pattern and Moving Averages as yet, it has closed very near to these levels.

The Technicals

For today, Candlesticks Chart of Nifty is very eventful; technically. Colour of the candle is insignificant for today as there is very minor difference between open and close levels of Nifty . Two bearish formations - A long upper shadow and An on-neck line have occurred on Candlesticks charts. The MACD is bearish since it is trading below its signal line. The RSI has just reached its lowest value in the last 14 period(s). This is bearish.

Pattern Analysis of Daily High Low Chart of Nifty shows that the markets are ranged and neither able to upward penetrate the resistance levels, now important supports are downward broken. Also the important support of 100 Day Moving Average is also still intact.

F&O Data Analysis

This week being March series expiry week, analysis of F&O data is also important, which reveals that there is a build up of maximum open interest in Nifty options side is at strike 8500 puts indicating support. Also, build up is seen on near money strikes. Roll over , so far is low and roll over cost is high. This will make March expiry volatile. Roll overs seem to be devoid of momentum, as Nifty roll

overs is just around 32 %

Conclusion

In light of this technical analysis of Nifty for today read along with F&O data, it can be concluded that today market are slated to open on a flat note with positive bias. Today’s open and initial hours of trade becomes very important. For today also the support range of 8508 – 8520 is expected to act as major supports for the markets. The markets need to open and sustain above this range to avoid weakness. Any up move will face resistance at around 8644 today also. Today’s session is expected to be volatile also as indicated by F&O data, as we near the March expiry.

However, no major downward breach is expected, at least of today, as - an inverted hammer had occurred on Candlesticks charts. If this occurs during a downtrend which appears to be the case with NIFTY it implies a reversal. Also the important supports of Patterns and 100 Day Moving Average of Nifty are still intact and have not been broked.

It is advised to be cautious and alert at every highs today, with positive bias.

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 -- Tuesday, March 24, 2015

Daily Market Trend Guide Tuesday, 24 March 2015

MARKET REPORT March 23 2015

The Markets saw a completely lacklustre session as the Markets headed in no direction while ending the day with modest losses. The Markets saw a positive opening and formed the intraday high of 8608.35 in the very early minutes of the trade. After this, the Markets traded in a very narrow and capped range in sideways trajectory while heading nowhere. The Markets continued to trade flat until afternoon trade after which it slightly dipped into the negative. It did not see much downside either while it formed the intraday low of 8540.55. Even this was spent in a very narrow and capped range as the Markets headed nowhere and remained completely directionless. The volumes too continued to remain lower. It finally ended the day at 8550.90, posting a net loss of 20 points or 0.23% while forming a slightly lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, MARCH 24 2015

In previous trading session, the market remained exactly in the range expected. Also, as expected, the weakness continued, with lackluster trading though the day.

Technical Analysis clearly indicates that markets today are poised for an important trading session .

Pattern Analysis of Daily High Low Chart of Nifty shows that the during the current correction, markets have entered in a short range. The upper level of this range is 8644 with lower side being 8508.

For today, the Candles Charts a black body occurred with pattern being steadily downward and bearish. Important Indicator RSI continues to be bearish since last almost ten trading sessions and also continues to exhibit Failure Swing as The RSI has just reached its lowest value in the last 14 periods This is bearish. MACD too remains bearish since it is trading below its signal line.

Markets are poised to open on a slightly negative note today. As foretold from here, the markets experienced technical correction. But as we have mentioned in yesterday’s edition of Daily Market Trend Guide, the markets are very near to its major support points , as indicated both by Pattern Analysis and Moving averages.

Pattern Analysis shows major support for the market at the lower side of the Rectangle the level being 8508 – 8513. Another major and very important support is the 100 Day Moving Average of Nifty, which is 8520 as of today. These levels, that is the range of 8508 – 8520 are expected to act as major supports for the markets during this corrective phase.

Going by the above technical analysis of Nifty, we expect today’s session to be very important . The above important supports are going to be tested today. It remains to be seen, whether they are breached or markets takes support at these levels and correction takes a breather.

For today be cautious keeping the above levels in mind, alertness at every rise and 8644 as resistance at upper levels.