Gemstone Equity Research & Advisory Services

Thursday, June 23, 2016

Daily Market Trend Guide -- Thursday, June 23, 2016

MARKET TREND FOR THURSDAY, JUNE 23, 2016

The Markets have continued to remain in a ranged session yesterday as well while it ended marginally in the red. Today’s analysis once again continue to remain on similar lines as the markets are likely to continue to remain in a capped range given the pendency of Brexit vote which is later today. Today, we can expect the Markets to open on a flat to mildly positive note and look for directions and the levels of 8260 will continue to act as immediate resistance levels for the Markets. The Markets are not likely to take a definite directional move and will react to the Brexit outcome tomorrow.

For today, the levels of 8260 and 8295 will act as immediate resistance levels for today. On the downsides, supports exist at 8180 and 8140 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.8794 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 13.33 lakh shares or 7.89% in Open Interest. This clearly shows some reduction in positions yesterday in the system.

Coming to pattern analysis, after forming a immediate top of 8295 levels, the Markets have now been consolidating in a broad range since last 12 sessions and have made another lower top, tentatively at 8260 levels. Having said this, today as well, we will continue to see the Markets consolidating in the first half of the session. The second session might remain volatile as participants will try to adjust their trades preparing for the Brexit outcome tomorrow. Having said this, in event of any downsides, the likely supports for the Markets can be the rising trend line drawn from the February lows and after that the 50-DMA. In case of any eventuality, the Markets may not see any damage beyond this.

Overall, so far as today is concerned, it is best advised to refrain from taking any major trades today. As always, exposures to be kept at minimum levels and more emphasis should be laid on preservation of cash. Shorts to be thoroughly avoided and any dips should be continued to be utilized to make very selective purchases. Overall, cautious outlook is advised for today.

Milan Vaishnav, CMT

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

Wednesday, June 22, 2016

Daily Market Trend Guide -- Wednesday, June 22, 2016

MARKET TREND FOR WEDNESDAY, JUNE 22, 2016

Yesterday, the Markets remained extremely ranged and while it ended the day with minor losses, today is likely to remain no different. Today, we can once again expect the Markets to open on a flat to mildly negative note and look for directions. The Markets are not likely to take any directional view in definite manner given the pendency of the Brexit vote and this will, therefore, keep our analysis for today much on similar lines that of yesterday. While the levels of 8295 will continue to act as immediate top for the Markets, it will keep oscillating in a ranged manner on the downside.

For today, the levels of 8245 and 8295 will act as immediate resistance levels for the Markets. The supports come in lower at 8180 and 8120 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.4318 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD still remains bearish as it trades below its signal line.

On the derivative front, the NIFTY June futures have shed over 5.84% in Open Interest. The NIFTY PCR stands at 1.14 as against 1.15.

While having a look at pattern analysis, we observe that the intermediate top of 8295 that the Markets have made has remained sacrosanct as of now. The Markets have registered a slight decline yesterday and if it does not move past yesterday’s high of 8257, it will then report a “lower high” than 8295 and this will indicate slight weakness in the immediate short term. If we move past 8257, then the Markets are likely to test its immediate high of 8295 levels. It is important to note that given the pendency of the Brexit vote, the Markets are likely to see high amount of volatility. However, it also becomes important to note that the Markets currently shows no structural damage as of now as it continues to trade above all of its moving averages.

Overall, we continue to reiterate our modest stance on the Markets. Given the fact that the Brexit is pending, and given the fact that this can induce large amount of volatility, the overall exposures should be kept very limited and modest with using each up move to book and protect profits. On the same note, shorts should be avoided as no structural signs of weakness are seen. Overall, moderate exposures with high preservation of cash is advised for the immediate short term.