Gemstone Equity Research & Advisory Services

Friday, March 8, 2013

Daily Market Trend Guide -- Friday, March 08, 2013

MARKET TREND FOR TODAY March 08, 2013

Markets had a session perfectly as analysed in yesterday’s edition of the Daily Market Trend Guide as the Markets opened moderately negative, consolidated for half of the session and then staged a smart rally as it continued its up move moving past its key resistance levels. After opening on a moderately negative note, the markets traded in capped range 20-odd points in the negative territory as it gave its intraday low of 5801.30. After moving in this range for almost half of the session, the Markets staged a sharp and smart rally. It went on to give the day’s high of 5878 and ended the day at 5863.30, posting a smart gain of 44.70 points or 0.77%. The Markets continued to form a higher top and higher bottom on the Daily High Low Charts.

For today, the Markets are likely to open on a flat note and look for directions. There are chances that it takes some breather as it has staged a almost 200-point pullback from its recent lows. However, with the undercurrent remaining absolutely intact, the intraday trajectory would be important to watch for.

For today, the levels of 5890 and 5945 would be key resistance levels to watch out for. The levels of 5942, the 100-DMA levels is likely to act as support at Close levels above which the Markets have closed.

The lead indicators suggest that in spite of some consolidation that we might see again, the trend remains buoyant. The RSI—Relative Strength Index on the Daily Chart is 50.2003 and it has reached its highest value in last 14-days which is Bullish. Also, RSI has set a new 14-day high where as NIFTY has not yet and this is BULLISH DIVERGENCE. The Daily MACD too which has been trading bearish since couple of weeks has reported a bullish crossover as it now trades above its signal line as is therefore bullish.

On the derivative front, NIFTY Future shave added over 2.40 lakh shares or 1.43% in Open Interest and this is a bullish sign as it shows that NIFTY has added further long positions. The NIFTY PCR stands at 1.05 as against 1.

The above reading clearly shows that the Markets are most likely to continue with its up move. If some consolidation happens, it is likely to remain short lived before Markets resumes its up move again.

All and all, there are bright chances that the Markets continues with its up move after flat opening or a brief consolidation. Even in case of mild weakness, it would be for very short term as the under current remains absolutely buoyant. Any weakness, as suggested yesterday also, should be used to take fresh positions. However, while maintaining selective approach, profits too should be protected at higher levels. Overall, continuation of positive outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Thursday, March 7, 2013

Daily Market Trend Guide -- Thursday, March 07, 2013

MARKET TREND FOR TODAY March 07, 2013

The Markets continued with its up move yesterday and also resisted around its expected resistance levels but still ended the day with modest gains. The Markets opened on a positive note on back of favourable global cues and gave its intraday high of 5828.70 in the late morning trade. Thereafter, the markets continued to trade in a capped range for the rest of the session as it kept moving in a 20-odd points capped range. It finally ended the day at 5818.60, posting a modest gain of 34.35 points or 0.59% while continuing to form a higher top and higher bottom on the Daily High Low Charts.

Today, though undercurrent remains intact, we may see a modestly negative to flat opening in the markets as there are chances that the Markets may take some breather from the pullback that it has been witnessing. The Markets are expected to open and trade in a capped range in the initial trade and the levels of 5800 would be important to see if further weakness creeps in.

For today, the levels of 5845.72, which is the 100-DMA of the Markets is likely to act as resistance at Close and this would be the important level that the Markets should watch out for.

The lead indicators depict a mixed picture. The RSI—Relative Strength Index on the Daily Chart is 45.5081 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD is still bearish as it continues to trade below its signal line.

On the Candles, A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles--this makes the current rising window even more bullish.

On the derivative front, NIFTY Futures have went on to add over 3.29 lakh shares or over 2.01% in Open Interest and the NIFTY PCR stands at 1 as against 0.94.

To make sense of the above reading, the Markets certainly have a bullish undertone and though some consolidation in a capped range cannot be ruled out, at the same time, major correction is not likely. The Markets may spent couple of days trading in a range again before it attempts to move ahead and past its 100-DMA in order to continue with its reversal attempt.

All and all, mildly negative to flat opening likely and the Markets may trade in a range. It shall have to maintain levels of 5790-5800 and above in order to just consolidate and avoid any corrective weakness. Shorts should be refrained from and any temporary consolidation or mild downside should be utilized to make fresh purchases. Overall, cautious optimism is advised for today.