Gemstone Equity Research & Advisory Services

Friday, August 19, 2016

Daily Market Trend Guide -- Friday, August 19, 2016

MARKET TREND FOR FRIDAY, AUGUST 19, 2016

Though the Markets ended the day yesterday with modest gains, the levels of 8700-8725 continued to remain as intermediate top for the Markets. Today as well, the Markets are likely to see a flat to mildly negative opening and therefore this keeps our analysis for today on similar lines that of yesterday. Though the Markets may open flat to mildly negative the overall movement is likely to remain range bound and the mentioned levels will continue to act as resistance.

The levels of 8700-8725 will continue to act as immediate resistance levels for the Markets. The supports come in at 8640 and 8605 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.1958 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bearish as it trades below its signal line.

On the derivative front, the NIFTY August futures have shed over 7.34 lakh shares or 2.99% in Open Interest. This shows some amount of short covering that have taken place in yesterday’s session.

Coming to pattern analysis, after falling out of the upward rising channel drawn from February lows, the Markets have continued to keep the levels 8700-8725 sacrosanct as its immediate resistance. The Markets have not moved past these levels and very much as analyzed in previous editions, it has shown limited downsides as well. Much of the corrective activity has come in the form of range bound sideways movement and currently the Markets continue to trade within a small congestion zone while the mentioned levels continue to act as immediate resistance levels for the Markets.

Overall, we will not see any runaway rise until the Markets moves past the levels of 8700-8725. Until this happens, we will see the Markets remaining in corrective mode and this will result into range bound volatile movements, though the downsides are likely to remain limited. We continue to reiterate our view to continue to utilize intermittent downsides to make selective purchases while vigilantly protecting profits at higher levels.

Milan Vaishnav, CMT

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

Thursday, August 18, 2016

Daily Market Trend Guide -- Thursday, August 18, 2016

MARKET TREND FOR THURSDAY, AUGUST 18, 2016

Range bound consolidation continued in the Markets as it continued to remain in sideways trajectory on Daily Charts while ending the day with modest losses. Today as well, the Markets are expected to open on a flat to modestly positive note and look for directions and this keeps our analysis on similar lines that of yesterday. We will continue to see the Markets trading in a well defined range while the levels of 8700-8725 will continue to act as immediate top for the Markets for the near term.

For today, the levels of 8670 and 8700 will act as immediate resistance levels for the Markets. The supports come in at 8610 and 8565 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.7773 and this remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish as it trades below its signal line.

On the derivatives front, the NIFTY August futures have shed over 2.56 lakh shares or 1.03% in Open Interest. This signifies some creation of fresh short positions in the Markets again.

While having a look at pattern analysis, as mentioned often in our previous editions, though the Markets have fallen out of the rising channel that is drawn from the February lows, the corrective activity has been in form of more of sideways range bound movements than any major downsides. Keeping in line with this fresh pattern, we can fairly expect the Markets to continue to exhibit limited downsides while at the same time, the levels of 8700-8725 will continue to act as important resistance and intermediate top for the Markets. No sustainable up move shall occur until the Markets move past this level.

Overall, any corrective activity, especially in the form of a sideways movement is healthy for the Markets in the long term. While the overall trend remaining intact and with the Markets continuing to exhibit inherent buoyancy, we continue to reiterate the approach of using any intermittent downsides to make selective purchases. Until the levels of 8700-8725 are breached on the upside, all profits will required to be protected vigilantly though major shorts should be avoided. More preservation of cash to make selective purchases during dips should be done maintaining a positive caution in the Markets.