Gemstone Equity Research & Advisory Services

Tuesday, January 3, 2017

Daily Market Trend Guide -- Tuesday, January 03, 2017

MARKET TREND FOR TUESDAY, JANUARY 03, 2017

Quite on analyzed lines, the NIFTY consolidated today after four sessions and over 300-odd points of gains and ended the day with nominal loss of 6.30 points or 0.08%. In a way, the Markets have displayed great amount of strength at Close levels by not declining after robust gains over previous days. Today, we expect a stable start once again but at the same time, we expect the NIFTY to consolidate in a capped range. The 50 and 200-DMA of the Markets will continue to act as resistance and we will also see some volatility remaining ingrained in the Markets.

For today, the levels of 8065 and 8310 will act as immediate resistance levels for the Markets. The supports will come in at 8140 and 8105 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.2908 and it remains neutral as it shows no bullish or bearish divergence. No failure swings are seen as well. The Daily MACD stays bullish while trading above its signal line. On Candles, no significant formation is observed.

On the derivative front, the NIFTY January futures have shed 75,900 shares or 0.44% in Open Interest. The figure remains more or less unchanged and does not signify any major shift in the underlying sentiment.

Coming to pattern analysis, the NIFTY has reached the pattern resistance zone which lies just ahead of current levels. It has marked the 7900-7920 zones as a important major pattern supports and currently has reached the upper resistance zone of the broad trading range that the Markets have traded in last couple of months. In any given case, the 7900-7950 zone will act as major strong pattern supports and on the upside, the levels of 200-DMA will continue to act as important resistance levels for the Markets.

All and all, the NIFTY is expected to continue with its up move and logical levels of 200-DMA which stands at 8264 today can be tested today or in coming sessions. At the same time, we are all likely to witness sessions with low volumes and some good amount of volatility ingrained in it. This may lead to some consolidation and some intermittent profit taking bouts. However, given the overall structure of the Charts, reading of the lead indicators and the F&O data, we can fairly conclude that the underlying sentiment remains buoyant.

Milan Vaishnav, CMT

Technical Analyst

(Research Analyst, SEBI Reg. No. INH000003341)

Member:

Market Technicians Association, (MTA), USA

Canadian Society of Technical Analysts, (CSTA), CANADA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Monday, January 2, 2017

Daily Market Trend Guide -- Monday, January 02, 2017

MARKET TREND FOR MONDAY, JANUARY 02, 2017

Equity Markets continued its uptick on Friday as the NIFTY posted yet another day of gains and ended the last trading day of the year 2016 with gains of 82.20 points or 1.01%. On Year-to-date basis, the NIFTY ended 2016 with net gains of 239.45 points or 3.01% grossly under-performing its peers. Today, as we enter into the first trading day of 2017, we can once again expect a stable start to the Markets. We may see some positive trade, at least in the initial session and going ahead, today and in sessions to come, the levels of 8260 will remain extremely critical to watch out for. This is the place where in the NIFTY meets multiple pattern resistances. We can certainly expect some consolidation at around these levels.

For today, the levels of 8230 and 8260 will act as immediate resistance for the Markets. Supports will come in at 8145 and 8100 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.75.63 and it has reached its highest value in last 14-days which is Bullish. Also, RSI has set a fresh 14-period high whereas the NIFTY has not yet and this indicates Bullish Divergence. The Daily MACD is bullish as it trades above its signal line. On the Candles, a Rising Window occurred. It is a gap on the upper side and this signals potential continuation of the uptrend.

On the derivative front, the NIFTY January futures have added yet another 9.64 lakh shares or 5.97% in Open Interest.

Coming to pattern analysis, the NIFTY has re-established the 7900-7920 zones as its important pattern support. After bouncing off from those lows, the NIFTY took support once again forming a Double Bottom formation. It validated this formation as it bounced back nearly 300-odd points from there. As of now, this level now reinforces itself as its important pattern support. We expect the NIFTY to logically move towards 200-DMA which rests at 8260 today.

Overall, while not ignoring the fact that the NIFTY has seen some 300-odd points of rise in last four sessions, some possibilities of consolidation happening at higher levels certainly exists. However, the other factors, such as the F&O data, the lead indicators and its structure and the overall pattern analysis indicate continuation of uptrend. So, whatever consolidation that we may see going ahead, will be expected to be in form intermittent profit taking bouts. We continue to maintain positive outlook on the Markets.