Gemstone Equity Research & Advisory Services

Friday, October 14, 2011

Daily Market Trend Guide -- Friday, October 14, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets traded yesterday almost in line with the analysis carried out as it opened positive, made a intraday top and transformed itself into negative falling trajectory to end the day with nominal losses while continuing to consolidate. In this process, the Markets have continued to form a lower top and lower bottom on the Daily High Low charts.

Technically speaking, since the Markets have ended the day near the low point of the day, it is expected to open on a moderately lower note and trade negative in the early trade while looking for directions and heavily depending upon the intraday trajectory that it shall form in the early trade.

For today, thus, expect the Markets to open on a moderately low to flat note and trade in a range in the initial trade. For today, the levels of 5105 an 5130 are expected to act as resistance while the levels of 5050 and 5026 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 55.0874 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trade above its signal line.

Having said this, it is important to note that, as often pointed out in our previous editions of Daily Market Trend Guide, the Markets still continues to remain in range and meaningful and sustainable rally shall occur only after the Markets moves past the levels of 5170. Further, in the yesterday’s session, the Markets (Nifty) has shed some 5% in open interest which shows some unwinding has been done from higher levels. However, as against this, the FIIs have remained net buyers in Cash Segment. All and all, from all that is mentioned above, it is clear that Markets will see some easing or at least continue to see some consolidation from these levels and the upside is expected to remain capped. It is thus advised to remain highly stock specific while initiating longs and keep protecting profits vigilantly at higher levels. Volatility shall remain. Overall, cautious outlook is advised for today.

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

Thursday, October 13, 2011

Daily Market Trend Guide -- Thursday, October 13, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets had a strong session yesterday as it ended the day with robust gains though remaining quite volatile during the day post reacting to IIP numbers. The Markets continued to give a sharply higher top and higher bottom on the Daily High Low Charts.

The Markets are expected to continue from where it left yesterday and continue with its up move at least in the initial trade but they are equally likely to consolidate at these levels.

For today, expect the Markets to open on a moderately positive note and will look for directions post opening. There is possibility that after opening on a moderately positive note, it may form a sideward or falling trajectory and may consolidate.

For today, the levels of 5120 and 5145 are likely to act as resistance and the levels of 5034 and 5005 shall act as supports.

The RSI—Relative Strength Index on the Daily Chart is 56.3520 and it has reached its highest value in last 14-days. However, it does not show any positive or negative divergence.

The Daily MACD continues to remain bullish as it trades above its signal line.

Having said this, it is still very important to note that the Markets continue to remain in a original broad trading range of 5170 on the upper side and 4730 on the lower side and though it may have made a remarkable pullback on expected lines, it is still to make any pattern breakout on the upside, which shall occur only after the Markets moves past the levels of 5170 comprehensively with good volumes.

All and all, the Markets have given a pullback of 368-odd point from its day’s low couple of sessions back and the possibility of consolidation around these levels cannot be ruled out. Also, along with fresh buying, lots of short covering was also seen, adding to the possibility of consolidation today. It is thus advised to remain highly stock specific in taking longs and vigilantly protect profits at higher levels. Cautious outlook is advised for today.