Gemstone Equity Research & Advisory Services

Wednesday, April 8, 2015

Daily Market Trend Guide -- Wednesday, April 08, 2015

MARKET REPORT April 08, 2015

Markets had a terribly volatile session more so because of technical reason while it also reacted to RBI Credit Policy Review though it more or less remained a non event. The Markets saw positive opening on expected lines and formed its intraday high of 8693.60 in the early minutes of the trade. Thereafter, until the RBI came out with its expected announcements wherein it kept its key rates unchanged, the Markets had pared all of its morning gains to trade flat. It dipped into the negative while the announcements were made but recovered to trade back in the green. However, the second half of the session saw some more pressure being exerted on to the Markets as the Markets once again pared its recovery rapidly. It went on to form the day’s low of 8586.85 losing over 105-odd points from high point of the day. The last hour and half once again saw volatile recovery taking place as the Markets recouped all of its losses to trade back into the green. It finally ended the day at 8660.30, posting a flat close with negligible gain of 0.40 points or 0.01%.

MARKET TREND FOR WEDNESDAY, APRIL 08, 2015 B

The Markets are likely to trade more or less on similar grounds like that of yesterday. We can expect a quiet to modestly positive opening today and the Markets are likely to approach its 50-DMA, which is 8720. This level is important to watch out for near term as the Markets are likely to consolidate around these levels after successfully attempting a pullback from lower levels.

The levels of 8720 and 8745 would act as immediate resistance for the Markets. The supports exist at 8640 and 8570 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.4098 and it has reached its highest value in last 14-days which is bullish. Also, the RSI has formed a fresh 14-period high while NIFTY has not yet and this is Bullish Divergence. The Daily MACD is bullish while it trades above its signal line.

On the derivative front, the NIFTY APRIL Futures have 47,975 shares or 0.25% in Open Interest. This is negligible as compared to OI shedding that we witnessed in the prior sessions.

Coming to pattern analysis, as mentioned in our yesterday’s edition of Daily Market Trend Guide, the Markets have attempted a pullback from its lows posted on March 27^th. However, post this pullback, it is likely that the Markets consolidate a bit around these higher levels before it inches upward again. Such amount of consolidation would be healthy for the Markets and any rise after that would confirm the reversal.

All and all, the Markets still trades below its 50-DMA and therefore, this level would be important level to watch out for in the immediate term. There are fair amount of chances that the Markets see a healthy consolidation at higher levels. This can be in a bit wide trading range but this would keep the overall pullback healthy and confirm the attempted reversal for the Markets. Vigilant protection of positions is advised at higher levels.

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

Tuesday, April 7, 2015

Daily Market Trend Guide -- Tuesday, April 07, 2015

MARKET REPORT April 07, 2015

The Markets traded precisely on the analysed lines as it opened quiet, traded directionless in the first half of the session but ended the day on a buoyant note. The Markets saw a quiet opening and post such openings traded in a very capped and narrow 20-odd point range until afternoon while slipping in and out of the positive territory. It formed its day’s low of 8573.75. The seconde half of the session, Markets once again saw sustained strength returning. It crawled back into the positive territory and then kept gradually forming new intraday highs. It went on to form the day’s high of 8667.55 and while sustaining these levels, it finally ended the day at 8659.90, posting a net gain of 73.65 points or 0.86% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

TECHNICAL ANALYSIS OF NIFTY AND MARKET TREND FOR TUESDAY, APRIL 07, 2015

Today remains a crucial day for the Markets. Expect the Markets to open on a modestly positive note and look for directions with a mild upward bias. The expected positive opening would see the Markets opening near its 50-DMA levels and therefore it would be important to see the behaviour of the Markets vis-à-vis this level. Further Markets would also react to the RBI Policy review slated to come in later today.

The levels of 8720 and 8745 would act as immediate resistance levels for the Markets. The supports come in at 8640 and 8570 levels.

The RSI—Relative Strength Index on the Daily Chart is 52.3867 and it has reached its highest value in last 14-days which is bullish. Further, the RSI has set a fresh 14-period high while the NIFTY has not yet and this is Bullish Divergence. As expected and mentioned in our yesterday’s edition, the Daily MACD has reported a positive crossover. It his now bullish trading above its signal line.

On the derivative front, the NIFTY April futures have further shed over 3.70 lakh shares or 1.95% in Open Interest.

Returning to pattern analysis, the Markets moved past one of its important pattern resistance of 8640. With today’s mildly positive opening expected, it would open near its 50-DMA levels. There is great likelihood that the Markets consolidate around these levels. The consolidation would in fact make the Markets healthier and the possibility of the Markets consolidating rather than continuing to move up increases as it has been shedding Open Interest in the previous sessions.

All and all, the Markets would see a modestly positive to quiet opening. It is likely to trade in a given range before it reacts to the RBI Policy review. The reaction would be more to the guidance issued as majority of the participants expects a status quo on the rate scenario. With the likelihood of the Markets consolidating on the higher levels, it is advised to keep booking profits on every rise now while keeping the fresh purchases limited and selective.