Gemstone Equity Research & Advisory Services

Wednesday, October 22, 2014

Daily Market Trend Guide -- Thursday, October 23, 2014

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MARKET TREND FOR THURSDAY, OCTOBER 23, 2014

The Markets opens tomorrow for Mahurat Trading session from 6.30 PM to 7:30 PM. The session would more or less remain in a trading range. The Session is likely to remain more or less of ceremonial in nature and no major swings are updated.

Looking a the technical charts, the Markets have formed higher top and higher bottom on the Daily Charts and it is likely to extend its up move in coming sessions. The levels of 8030 and 8065 would act as supports and the levels of 50-DMA, i.e. 7932.90 would act as support at Close levels in case of any range bound consolidation.

The RSI—Relative Strength Index on Daily Chart is 54.9607 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD has reported a positive crossover, perfectly in lines as expected in our yesterday’s edition. It is now bullish as it trades above its signal line. On 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 10 rising windows in the last 50 candles--this makes the current rising window even more bullish.

Overall, with just an hour of trading, no major moves are expected. However, in case of any profit taking, the overall range would remain capped with 50-DMA acting as supports. Sector rotation would continue and while remaining selective, overall positive outlook is advised for the day.

Friday, October 24^th remains a Trading Holiday

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Tuesday, October 21, 2014

Daily Market Trend Guide -- Wednesday, October 22, 2014

MARKET REPORT October 21, 2014

The Markets witnessed quite volatile session as it swung back and forth in 60-odd points day but ended the day with modest gains while continuing to resist to its 50-DMA. The Markets did open positive on expected lines and gained further strength post positive opening. The Markets formed its intraday high of 7936.60 in the first half of the session. However, the 50-DMA did resist on the upside as the Markets pared nearly all of its gains by afternoon trade after reacting from the day’s high. However, it saw some strength coming back as it again recovered all of lost intraday gains and went back to trade near the high point of the day. The Markets spent the last hour of the trade trading in a capped range and finally ended the day at 7927.75, posting a modest gain of 48.35 points or 0.61% while forming higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, OCTOBER 22, 2014

As evident from the Charts, the Markets have closed at its 50-DMA levels and have resisted there at the Close levels. However, given the overall structure of the Charts, the Markets are likely to open on a positive note and therefore likely to open and trade above its 50-DMA levels. It would be important for the Markets to move past this level and failing which the Markets would continue to trade in a capped range in volatile manner.

The levels of 7927.91 (50-DMA) would act as resistance if the Markets opens below this. However, with chances of positive opening this level is likely to act as support. Overall resistance and supports are 7975 and 7850 respectively.

The RSI—Relative Strength Index on the Daily Chart is 50.7194 and it has reached the highest value in last 14-days which is bullish. Further, the RSI has set a new 14-period high whereas NIFTY has not yet and this is Bullish Divergence. The Daily MACD, though it remains negative while trading below its signal line, it likely to give positive crossover in coming days if the Markets do not see major declines and managed to trade at least in a range.

On the derivative front, the NIFTY October futures have further added over 5.57 lakh shares or 3.44% in Open Interest. This signifies creation of further long positions and this is likely to keep the Markets in motion.

Going by pattern analysis, the Markets are currently in broad trading range. The Markets took support on 100-DMA twice and now currently trades above its important pattern support of 7800-20 and 100-DMA acting as its supports and the levels of 50-DMA acting as its immediate resistance. With the Markets closing very near to its 50-DMA, it is likely to move past that level as well. In that case we can see some more up tick coming in. Failing this, the Markets would continue to remain in broad trading range.

Overall, it is advised to continue to remain selective in fresh purchases. In event of any bounce on the upside, it should be used to exiting long positions. Any up move should be first utilised for protecting profits in existing positions and then on making fresh selective purchases in the laggards. Overall, with the general bias remaining on the upside, cautious optimism is advised for the day.