Gemstone Equity Research & Advisory Services

Thursday, May 21, 2015

Daily Market Trend Guide -- Thursday, May 21, 2015

MARKET REPORT May 21, 2015

Markets ended yet another day with gains today but did so with modest gains as it spent the day in a narrow and capped range. The Markets saw positive opening on expected lines and after a decently positive opening, it gained some further strength to form the day’s high of 8440.35. The Markets tested these levels twice in the morning trade but did not witness a significant breakout from here. The second half of the session saw some minor paring of gains as the Markets came off from its day’s high. Again no sharp movement on either side was seen and the Markets ended up spending the rest of the session in a narrow and capped range in sideways trajectory. It finally ended the day at 8423.25, posting a modest gain of 57.60 points or 0.69% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, MAY 21, 2015

Today’s session is likely to remain on similar lines and we can once again expect a quiet to modestly positive opening for the Markets. The Markets are likely to approach its 50-DMA levels and therefore it would be again prone to some consolidation from higher levels. With overall bias on the upside some amount of volatility too is expected to remain in the Markets.

For today, the levels of 8487 and 8535 will act as immediate resistance for the Markets. The supports would come in at 8310 levels which is the 200-DMA of the Markets.

The RSI—Relative Strength Index on the Daily Chart is 53.3037 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, NIFTY May futures have shed 19,600 shares or 0.14% in Open Interest. This is a very negligible figure and one can draw inference that OI has remained practically unchanged and therefore no major short covering has happened.

Taking a cue from pattern analysis, as mentioned in our previous editions of Daily Market Trend Guide, the Markets have attempted a reversal after forming its potential bottom on March 7^th and have in the process managed to move past its 200-DMA. In today’s session and in the sessions to come, it would be important for the Markets to remain above this 200-DMA level. Some amount of consolidation can be expected at higher levels but any breach below the 200-DMA will bring in some short term weakness in the markets.

Overall, the going has been good for the Markets in the past sessions but the amount of delivery based buying and the conviction that the Markets would otherwise require is missing and this causes a little cause of concern and opens up some chances of consolidation once again at higher levels. Keeping this in mind, very moderate stock specific purchases may be made but cautiously vigilant approach 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

Wednesday, May 20, 2015

Daily Market Trend Guide -- Wednesday, May 20, 2015

MARKET REPORT May 20, 2015

We had mentioned in our yesterday’s edition of Daily Market Trend Guide that we might continue to witness intermittent profit taking bouts. Markets yesterday ended the day with minor losses as it saw bout of profit taking while coming off from its day’s high. The Markets saw a modestly negative opening and it formed its intraday low of 8335 in the early minutes of the trade. After this, the Markets transformed themselves into rising channel and slowly recovered all of its losses. It continued to display strength as it added to the gains and went on to form the day’s high of 8427.80 in the afternoon trade. However, suddenly the Markets saw a profit taking bout and it came off from its highs and even dipped further into the negative territory. It showed some recovery but finally ended the day at 8365.65 with minor loss of 8 points or 0.10% while still continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, MAY 20, 2015

Today, once again, we can expect a day of consolidation for the Markets. The Markets are expected to open on a flat to modestly positive note and trade stable in the initial trade. However, we can expect the Markets to consolidate at higher levels and continue to remain in a broad trading range with the levels of yesterday’s high acting as immediate resistance.

For today, the levels of 8430 and 8500 are immediate resistance for the Markets. The supports come in at 8335 and 8270 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.7186 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, NIFTY May futures have shed 21,050 shares or 0.15% in Open Interest. This OI figures is nominal enough to be called unchanged and some amount of FII buying has been witnessed yesterday as well.

Coming to pattern analysis, the Markets are once again consolidating after it moved past the levels of 200-DMA. In normal course of business, this level of 200-DMA is likely to act as support in event of any consolidation and some downside, if any. The Markets are otherwise expected to slowly approach its 100-DMA levels of 8544 levels in due course of time if it successfully continues it’s up move and if it confirms the bottom that it formed on 7^th of May. Coming sessions would be critical to see if the Markets continues with its up move and if at all it consolidates, it holds on to its support of 200-DMA or not.

All and all, we can approach the Markets with positive outlook with initially good opening expected. However, volatility will remain at higher levels and just like yesterday, intermittent bouts cannot be ruled out. Delivery based buying has emerged but it has remained very sector specific yesterday. It needs to percolate to broader base as well to lay good foundation for potential and successful bottom formation.