Gemstone Equity Research & Advisory Services

Tuesday, September 20, 2016

Daily Market Trend Guide -- Tuesday, September 20, 2016

MARKET TREND FOR TUESDAY, SEPTEMBER 20, 2016

Monday’s session remained extremely range bound as the NIFTY moved in a narrow 20-odd points for the day while the Markets ended the day with modest gains. Today, our analysis remains on similar lines that of yesterday as the Markets are likely to continue to positively consolidate. The global markets too have attempted to stabilize around their key supports and this likely to positively aid the consolidation of domestic markets. BoJ, which is likely to make some critical changes with regard to Quantitative Easing and the Federal Reserve, which will cast its interest rate decision will solicit some reaction from the Markets as well.

For today, the levels of 8840 and 8895 will act as immediate resistance levels and the supports are likely to come in at 8760 and 8730 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.8151 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish while it trades above its signal line.

On the derivative front, the NIFTY September futures have added over 2.88 lakh shares or 0.90% in Open Interest.

Pattern analysis clearly suggests that the Markets are currently undergoing range bound consolidation and the undercurrent remains buoyant. After making a top at 8968 levels, the Markets achieved 100% throwback to 8700-8730 levels and it took support there. These levels continue to act as immediate major support and so long as it trades above this critical support zone, it is laying groundwork for a further up move. However, in coming days, it should be no surprise if we see capped trading range and some positive consolidation.

All and all, the session should be approached with positive bias. Though some amount of volatility cannot be ruled out, all dips should be continued to be utilized to make selective purchases while avoiding shorts. Sectoral out-performance will continue and stock specific action will dominate coming sessions. Overall, positive outlook is advised for the day.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member:

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

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, September 19, 2016

Daily Market Trend Guide -- Monday, September 19, 2016

MARKET TREND FOR MONDAY, SEPTEMBER 19, 2016

Friday’s session remained extremely choppy as the Markets saw an exceptionally strong start but at one point came off nearly 90-odd points from the high point of the day to end the day with modest gains. Today, we can expect a soft start to the session and we might see some more consolidation and volatility staying in the equity markets and the level of 8968 will continue to act as immediate sacrosanct resistance levels in coming days.

Today, the level of 8840 and 8895 will act as immediate resistance levels for the and the level of 8750 and 8710 will act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 54.8875 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bearish trading below its signal line. On the Candles, a long upper shadow occurred. Such formation on Candles has potential to halt any up move and may cause the Markets to consolidate and resist up moves. On the Weekly Charts, the Weekly RSI is 66.4487 and it has just crossed below from the topping formation which is bearish. Though it does not show any bullish or bearish divergence or any failure swing. The Weekly MACD stays bullish as it trades above its signal line. On the Weekly Candles, a falling window occurred. This, just like the Candle on the Daily Charts, has a potential to cause the Markets to consolidate.

On the derivative front, the NIFTY September futures have minor increase as it added just 80,925 shares or 0.25% in Open Interest.

While having a look at pattern analysis, the Markets have attempted a pullback after seeing 100% retracement / throwback from 8968 levels after achieving a breakout from 8700-8730 range. These levels, so far have acted as support while the Markets corrected while making 8968 as its immediate top. This level will continue to act as immediate resistance in coming days. It would be critically important to see the Markets trading above 8700-8730 range. If the levels are breached, it can bring some more weakness in the immediate short term.

All and all, we are likely to see the Markets remaining in corrective mood some range bound trade with some good amount of volatility cannot be ruled out. We will continue to see out performance from select stocks and all dips are likely to get utilized in making selective purchases. However, any runaway rise in the Markets is not expected.