Gemstone Equity Research & Advisory Services

Friday, May 2, 2014

Daily Market Trend Guide -- Friday, May 02, 2014

MARKET REPORT May 02, 2014

They Markets ended in red for the fourth day in a row on Wednesday after a volatile session. The Markets opened on a positive note and in the morning trade it moved in upward rising trajectory on a relatively stronger note while it formed its intraday high of 6780.15. It maintained its gains until afternoon trade and when it just seemed that the Markets may have a rebound, weakness crept into the Markets. The Markets gradually pared nearly all of it s gains to trade flat. Further in the late afternoon trade, the Markets weakened further as it came off over 120-odd points from its day’ high and form the intraday low of 6656.80. It did see some minor recovery in the end but finally ended the day at 6696.40, posting a net loss of 18.85 points or 0.28% while forming a similar top but sharply lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, the Markets shall open after a trading holiday yesterday. We might see a modestly positive opening in the Markets today but there are fair amount of chances that the Markets may continue to witness corrective activities. The positive trade may not be ruled out initially and the Markets may continue to see some short covering in the initial trade but the correction is likely to continue for immediate short term.

For today, the levels of 6730 and 6775 would act as immediate resistance for the Markets. The supports exist at 6650 and 6610 levels.

The lead indicators continue to show weariness on the Daily Charts. The RSI—Relative Strength Index on the Daily Chart is 51.7534 and it has reached its lowest value in last 14-days which is Bearish. Further to this, the RSI has set a new 14-period low but NIFTY has not yet and this is clear Bearish Divergence. The Daily MACD too is bearish as it trades below its signal line.

On the derivative front, the NIFTY May futures have added a nominal 53,050 shares or 0.41% in Open Interest. This can be interpreted as though there has been no major offloading seen at the end of the day, there was no short covering as well from the lows of the day on Wednesday.

Going by the pattern analysis, the Markets have formed an immediate top and has corrected since then in the last four trading sessions. Though it may not continue to correct on similar lines, it will overall more likely to correct after showing a gain for a day or so. This reading continues to remain supported by F&O data and the lead indicators as well.

All and all, today we might see a modestly positive opening today and gains might be seen in the initial trade but there are chances that the Markets continue with its corrective activities after a minor technical pullback. With such reading, we continue to advice to vigilantly protect profits on positions and remain moderate on overall exposure. Very selective purchases may be make at lower levels. Overall, continuance of cautious approach 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

Wednesday, April 30, 2014

Daily Market Trend Guide -- Wednesday, April 30, 2014

MARKET REPORT April 30, 2014

The Markets continued with its correction for the third day in a row, much on the expected lines as once again Markets ended the day with losses. The Markets opened on a positive note but remained positive only until few seconds while it formed its intraday high of 6779.70 in the very early seconds of the trade. The Markets then soon dipped into negative territory to trade modestly negative. The Markets showed trade in a capped range again as it moved sideways in a very narrow trajectory. It did make a feeble attempt to recover in the afternoon trade but gave up in the late afternoon trade once again as it saw some selling pressure coming in. It weakened further as it went on to post the day’s low of 6708.65. It finally ended the day at 6715.25, posting a net loss of 46 points or 0.68% while continuing to form a lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, the Markets are likely to see a modestly positive opening and is likely to trade positive in the early trade but there are all chances that the Markets continues with its correction. Though intraday trajectory would continue to remain critical, it is likely that the Markets may trade in negative trajectory post opening.

For today, the levels of 6760 and 6795 would act as immediate resistance for the Markets. The supports exist at 6685 and 6640 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.8205 and it has reached its lowest value in last 14-days, which is Bearish. Further, the RSI has made a new 14-period low but NIFTY has not yet and this is Bearish Divergence. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, NIFTY May futures have shed over 8.65 lakh shares or 6.29% in Open Interest. This is a clear indication that offloading of long positions have continued in NIFTY Futures . Stock futures too have shown net decline in Open Interest.

Going by the pattern analysis, the Markets have retraced after forming a immediate top of 6869 as it failed to break out on the upside from 6820 levels. This will now keep the Markets in corrective mode until these levels are breached with conviction. However, going by the pattern analysis, lead indicators and further going by F&O data, the Markets are very clearly likely to continue with its correction.

All and all, some amount of volatility will remained ingrained in the Markets. The markets may also see some intermittent bounces but it is very likely that it continues to remain in the corrective mode. Keeping in line with this analysis, we continue to reiterate caution and therefore the exposures should be kept moderate in the Markets while remaining very selective and stock specific. Overall, continuance of cautious approach is advised for today.