Gemstone Equity Research & Advisory Services

Saturday, July 16, 2011

Daily Market Trend Guide -- Friday, July 15, 2011

MARKET TREND FOR TODAY
The Markets yesterday had an extremely volatile session wherein the Markets recovered from its opening lows and went on to register gains, but again pared all of its recovery to end the day with nominal gains. While doing this, the markets have formed a higher top and similar bottom on the Daily High Low Charts.

For today, we are likely to see flat to positive opening in the Markets and thus, again, intraday trajectory that it forms would be crucial to decide the trend for the day.

With the Markets expected to open on a flat to mildly positive note, the levels of 5650 and 5675 shall act as resistance an the levels of 5541 and 5500 shall act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 53.7874 and is neutral as it shows no negative divergence or failure swing.

The Daily MACD continues to trade above its signal line. There are no potential triggers on either side on the Candles.

Though there are no triggers on the either side currently, the MACD is declining and is likely to cut its signal line from above, taking it in to negative zone.

Furthermore, the Markets still continues to remain in falling range, and now the falling channel trend line puts the overall pattern resistance at 5675.

As mentioned in our previous editions, the Markets shall have trend reversals only when it moves past this levels and until this happens, it will continue to remain in a broad falling channel, though giving intermittent rises.

All and all, volatility in the Markets cannot be ruled out. The Markets have support on its 100 DMA of 5567 at Close but it would be critically important to see if this support is taken. It is overall advised to remain highly stock specific until few sessions and keep protecting profits on either side. Overall, cautious approach is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Thursday, July 14, 2011

Daily Market Trend Guide -- Thursday, July 14, 2011

MARKET TREND FOR TODAY

The Markets attempted to pullback on expected lines, but continued to resist to its 100-DMA for most part of the session but managed to close a notch above that as it ended the day with decent gains and in the process formed a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a negative note and look for directions.

With the Markets expected to open on a negative note, again, like yesterday, the intraday trajectory would be critically important for the Markets in not only deciding on today’s trend, but also for coming couple of sessions.

For today, with the Markets expected to open on a lower note, the levels of 5570, 5640 shall act as resistance and the levels of 5501 and 5475 shall act as supports.

Though all lead indicators presently remain in place, they pose a weakening picture. The RSI—Relative Strength Index on the Daily Chart is 52.7392 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD, though presently trades above its signal line, any further weakness may make it bearish.

Having said this, the NIFTY Futures have added only negligible 1% in Open Interest even with positive trade yesterday and even with the Markets showing a spurt towards the end of the session. This signifies that there was more of short covering in the Markets and very little conversion of longs were seen. Thus, as mentioned in our yesterday’s edition of Daily Market Trend Guide, the fresh sustainable up move shall occur only after the Markets reverses the trend to move past 5750 levels as we still continue to trade in a broad falling channel.

All and all, range bound volatile movements in the Markets cannot be ruled out coupled with some volatility ingrained in it. It is advised to continue with the highly stock specific approach with vigilant protection of profits at higher levels. Overall, cautious outlook is advised for today.