Gemstone Equity Research & Advisory Services

Tuesday, June 16, 2015

Daily Market Trend Guide -- Tuesday, June 16, 2015

MARKET REPORT June 16, 2015

The Markets traded precisely as analysed as it attempted to crawl back above critical 8000-levels while it ended the day with modest gains. The Markets saw negative opening but formed its intraday low of 7944.85 in the early seconds of the opening trade. Markets soon rose to trade in the positive territory after such modestly negative opening. Though it trade in the positive territory, the gains remained very much capped and the Markets continued to struggle with the 8000-mark. This continued for major part of the session as the Markets kept going above and below of the 8000-mark. It was in the late afternoon trade that the Markets once again managed to move past that market again and this time went on to form the day’s high of 8057.70. It did came off a bit from these levels and the Markets finally ended the day at 8013.90, posting a net gain of 31 points or 0.39% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JUNE 16, 2015

The Markets have attempted to move back in to the broad trading range by crawling above its 8000-mark but it still continues to remain in the woods. Today, we can again expect the Markets to open on a quiet note and look for directions. Since the Markets once again have a all important task of keeping its head above 8000-mark, it keeps our analysis once again on the similar grounds.

The levels of 8050 and 8135 will act as immediate resistance levels for the Markets. The supports exist at 7950 and 7880 levels.

The RSI—Relative Strength Index on the Daily Chart is 38.3171 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remain bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 7.61 lakh shares or 4.57% in Open Interest. This is little worrisome figure as it suggest unwinding happening from upper levels. This will have to get replaced with fresh buying if the Markets were to keep its head above the all important 8000-mark.

Going by pattern analysis, the Markets did slip below the immediate double bottom support of 8000 but managed to crawl back inside it. This keeps the Markets into a broad trading range with the levels of 8350 acing as upper resistance. Having said this, as mentioned before as well, it would be critically important for the Markets to remain and trade above 8000-levels. In event of the Markets giving up this level, we can see some more weakness coming in for the immediate short term.

All and all, though the Markets have managed to trade above 8000-mark once again, the pullbacks have not been with required conviction and volumes. Though on the other hand, no major delivery based session has been seen as well. However, the Markets continue to remain in the woods for the time being and this call for keeping the overall exposure limited. Only select buying should be done while maintaining overall liquidity in the Markets.

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, June 15, 2015

Daily Market Trend Guide -- Monday, June 15, 2015

MARKET REPORT June 15, 2015

The Markets held on to the Thursday’s level on Friday as well as it moved in a range bound manner remaining bit volatile and ended the day with modest gains while the levels of 8000 continued to act as resistance. The Markets saw negative opening and formed its intraday low of 7940.30 in the early moments of the trade. It crawled into the positive territory after some time and in the afternoon trade reached its highest point of the day at 7995.60. The Markets never maintained any directional bias and moved in either direction remaining ranged bound. The Markets did not sustain this level as well and by late afternoon trade pared all of those gains to dip into negative again. The last hour of the trade saw some spurt from lower levels as the Markets again managed to move into the positive territory. It finally settled the day at 7982.90, posting a modest gain of 17.55 points or 0.22% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, JUNE 15, 2015

We continue with the direction of analysis that we had put forth on Friday. Today, we can expect the Markets to open on a quiet note and again look for directions. However, again, there are chances that the Markets attempts to move past 8000-levels and moves back into the trading range. However, until this happens, this level will continue to pose major resistance as well. We had mentioned some potential signs of bottom formation in our Friday’s edition. These are likely to be aided with the stable inflation data and sharply better IIP data that we got on Friday post Market hours.

For today, the levels of 8000 and 8075 are likely to act as important resistance. The supports come in at 7942 and 7880 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.1212 and this remains neutral without showing any failure swings or any bullish or bearish divergence. The Daily MACD remains bearish as it trades below its signal line. On the Weekly Charts, the Weekly RSI is 40.3076 and it has reached its lowest value in last 14-weeks which is bearish. However, it does not show any bullish or bearish divergence. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have added over 66,950 shares in Open Interest. This at least signifies that the spurt that we saw on Friday was not on account of any short covering.

Coming to pattern analysis, the Markets continues to trade within its filter of 8000-level support. There are chances that the Markets will attempt to crawl back inside the broad trading range. However, the level of 8000 will continue to act as major resistance and it would be crucial for the Markets to move past that level. Until this happens, the Markets would continue to remain in theoretical dangers of some more immediate short term weakness.

Overall, though high degree of caution should continue to prevail, we can expect at least some attempts by the Markets to move back into the broad trading range. However, the resistance level of 8000 would be crucial and it would be imperative for the Markets to move past 8000-levels. The Markets would also set it eyes on the WPI inflation date coming up later today. Overall, with the Markets critically poised, continuation of cautious outlook is advised for today.