Gemstone Equity Research & Advisory Services

Thursday, December 25, 2014

Daily Market Trend Guide -- Friday, December 26, 2014

MARKET REPORT December 26, 2014

After spending the most part of the session in a sideways trajectory, the Markets saw a rollover instigated jitters as it ended the day with losses. The Markets saw a quiet opening and traded positive in the morning trade. It traded with modest gains while it formed the day’s high of 8286.40. However, while resisting at these levels the Markets soon returned to its previous close levels to trade flat. Later in the afternoon trade, the Markets dipped slightly in the negative but over all continued to trade with capped and limited losses while moving in sideways trajectory. However, last half an hour of trade saw rollover dominated jitters as the Markets very suddenly pared ground in a near-parabolic manner. It went on to form the day’s low of 8155.25 towards the end. It finally settled the day at 8174.10, still posting a net loss of 92.90 points or 1.12% while forming a lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR FRIDAY, DECEMBER 26, 2014

The Markets would open after Christmas holiday but only for Friday’s session to be followed again by a weekend. The Markets are likely to see quiet opening and no major moves are expected as the volumes are expected to remain on lower side due to holidays. However, it would continue to resist to its 50-DMA levels again on the upside as it has closed below that.

The levels of 8258 and 8290 would act as resistance on the upside while the levels of 8085 would act as support in form of its 100-DMA.

The RSI—Relative Strength Index on the Daily Chart is 42.8010 and it remains neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD continue to remain bearish while trading below its signal line.

On the derivative front, the NIFTY January series have added over 49.18 lakh shares or 30.85% in Open Interest. The overall NIFTY and Market wide rollovers have remained slightly below its 30-month average.

Returning to pattern analysis, the Markets have dipped below its 50-DMA level again and therefore this level would act as resistance on its way up again. It would be very necessary for the Markets to move up and past this level in order to avoid any weakness from creeping in again. On the downside, the levels of 100-DMA remains a major support for the Markets.

Overall, given the near-absent volumes again, the Markets are less likely to see any major downsides again. However, the volumes would continue to remain lighter due to holidays and truncated trading week. It is advised to continue to remain light on positions and maintain liquidity. Purchases should be restricted to selective stocks and shorts should be strictly avoided as the overall trend continues to still remain intact.

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, December 23, 2014

Daily Market Trend Guide -- Wednesday, December 24, 2014

MARKET REPORT December 24, 2014

The Markets traded perfectly on expected lines as it halted its 3-day gaining streak and ended the day with modest losses while taking support on its 50-DMA levels. The Markets saw a quiet opening and soon gained strength and continued with its up move in the morning trade. It was in morning session that it formed its day’s high of 8364.75. The morning session saw the Markets then trade with capped gains. The second half of the session saw expected profit taking from higher levels as the Markets rapidly lost ground. It pared its morning gains and went further into negative to form the day’s low of 8252.85 losing more than 100-odd points from the high point of the day. It saw some minor recovery but it finally ended the day at 8267, posting a net loss of 57 points or 0.68% while still forming a slightly higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, DECEMBER 24, 2014

This session remains crucial for the Markets. First, we have a truncated week with Thursday being a holiday on account of Christmas; and second, because of this, we have a expiry coming up a day ahead. Keeping technicals in view, the Markets are again likely to witness a quiet opening and might trade range bound in initial trade. The levels of 50-DMA, 8254, would be crucial and the Markets should trade above that to avoid any weakness from creeping in again.

The levels of 8295 and 8360 would act as immediate resistance. The levels of 8254 would act as immediate support at Close levels.

The RSI—Relative Strength Index on the Daily Chart is 47.95 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD continues to trade bearish as it trades below its signal line but is attempting a positive rollover in coming sessions after getting flattened out.

On the derivative front, NIFTY December futures shed over 45.90 lakh shares or 25.58% in

Open Interest. The January series added over 51.53 lakh shares or 47.76% in OI. The rollovers continued and remained in line with its previous 3 months average.

Going by the pattern analysis, as we had mentioned in our previous edition of Daily Market Trend Guide, the Markets have consolidated after nearly 360-odd points of pullback. Also, as expected, it has attempted to take support at its 50-DMA levels. It would be of key importance for the Markets to maintain levels above its 50-DMA. So long as it remains above 50-DMA levels, it would consolidate and once again attempt to continue with its pullback.

Overall, being expiry day, the session is likely to remain dominated with rollover centric activities. The volumes have remained on much lower side and this is good in case of downsides. Any up move will have to be accompanied with good participation. The 50-DMA would be crucial to be watched out for and it would be imperative for the Markets to trade and maintain itself above that. Overall, while maintaining controlled exposure, positive caution is advised for the day.