Gemstone Equity Research & Advisory Services

Tuesday, May 31, 2016

Daily Market Trend Guide -- Tuesday, May 31, 2016

MARKET TREND FOR TUESDAY, MAY 31, 2016

The Markets are trading near its 8 month high and at the same time have started to show some sign of fatigue at higher levels. Today, the Markets are once again expected to start on a flat to mildly positive note but at the same time the intraday trajectory will be important to watch out for as there are chances that the Markets may witness some consolidation from higher levels.

For today, the levels of 8210 and 8245 will act as immediate resistance levels for the Markets. The supports come in much lower at 8120 and 8060 levels.

The RSI—Relative Strength Index on the Daily Chart is 69.8945 and it has reached its highest value in last 14-days which is bullish. However, it is nearly overbought and it does not show any bullish or bearish divergence. The Daily MACD is bullish as it trades above its signal line. A Spinning Top on the Candles shows some potential fatigue in the Markets.

On the derivative front, the NIFTY June futures have added over 7.57 lakh shares or 3.62% in Open Interest. The bulk of the OI remains on the long side, nearly to the extent of 82%.

Coming to pattern analysis, the Markets have successfully broken out of the symmetrical triangle on the daily Charts. Yesterday, it tested its technical target of 8200 as a intraday high. We had mentioned often in our previous editions that a logical targets can be 8200 levels if the Markets breaks out of the triangle consolidation. Having said this, it becomes important to note that the Markets have started to show some signs of fatigue at higher levels and it should not be surprising if we see some minor corrections from higher levels.

Overall, some consolidation from higher levels cannot be ruled out. It is also important to note that the level of 8242 is the 61.8% retracement on Fibonacci from 9112-6825 correction and therefore possibility of some correction setting in becomes even more likely. It is likely that we see some brief but intermittent selling bouts from higher levels. However, it is advised that shorts should be avoided at any levels and any up moves should be utilized to book and protect profits.

Milan Vaishnav,

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Monday, May 30, 2016

Daily Market Trend Guide -- Monday, May 30, 2016

MARKET TREND FOR MONDAY, MAY 30, 2016

The Markets ended yet another day with gains on Friday and today as well, it is all set to open with some more gains and look for directions. However, at this point, we need to factor in a fact that over last four sessions, the Markets have posted gains of 408-odd points on Close levels and with today’s expected opening gains, the Markets would be up nearly 450-odd points from the low point some 4 days back. This is enough indication that the Markets may show some signs of fatigue post opening and therefore, the intraday trajectory would be important to watch out for.

For today, the Markets are likely to have immediate resistance at 8190 and 8240 levels. The supports come in much lower at 8077 and 8025 levels.

The RSI—Relative Strength Index on the Daily Chart is 69.0986 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 is bullish as it trades above its signal line. On the Weekly

Charts, the Weekly RSI is 59.8899 and this too is bullish as it has reached its highest value in last 14-periods.The Weekly MACD continues to remain bullish as well as it trades above its signal line.

Coming to derivative front, the NIFTY June futures have added over 14.52 lakh shares or 7.45% in Open Interest.

While having a look at pattern analysis, the Markets have broken out from its triangle formation and as mentioned in our previous edition, the logical target that we can look around is 8200 levels. Having said this, it would be also important to factor in that the Markets will show some signs of fatigue and this possibility cannot be ruled out given the fact that it would have risen over 450-odd points in last 5 sessions. The Markets have a pattern resistance around 8200-8225 levels. On the Weekly Charts as well, the current levels show a similar pattern resistance few points from now.

Overall, with an expected positive opening expected, we now advice to reign in a word caution and with every up move, emphasis should now be placed on protecting / booking profits on existing positions. However, some select purchase may be continued to be made in select stocks as well. Overall, continuance of positive outlook is advised for today.