Gemstone Equity Research & Advisory Services

Tuesday, February 24, 2015

Daily Market Trend Guide -- Tuesday, February 24, 2015

MARKET REPORT February 24, 2015

What seemed to be a stable session yesterday took a bearish turn as the Markets reacted to the news of S&P report and issues of file leakages and ended the day with a deep cut. The Markets saw a modestly positive opening and formed the intraday high of 8869 in the early morning trade. Post forming of this level, the Markets traded more or less stable and moved with capped gains in a sideways trajectory on thin volumes. This continued until late afternoon trade as the Markets continued to trade with no directional bias but remained more or less stable. However, it took a bearish turn in the last hour and half of trade. It came off rapidly and dipped into the negative territory. It further went on to form the day’s low of 8736.10 in the final minutes of the trade. No major recovery was seen and it finally ended the day at 8754.95, posting a net loss of 78.65 points or 0.89% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, FEBRUARY 24, 2015

Today, expect a quiet opening in the Markets. The Markets may open modestly positive or flat and trade in a range. What we saw yesterday was more of a panic / knee-jerk reaction by the Markets but today, we can see some amount of stability returning in the Markets. There has been no structural breach on the Daily Charts. We have an eventful long week this time with the Markets trading also on Saturday due to Budget. Overall, though no major sell off or breach on Charts may be seen but the Markets would continue to consolidate until Budget.

The levels of 8790 and 8845 would act as immediate resistance levels. The supports would come in at 8985 and 8640 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.4726 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD is bearish after reporting a negative crossover and it now trades below its signal line.

On the derivative front, the NIFTY February futures have shed over 64.12 lakh shares or 27.96% in Open Interest whereas March futures added 60.58 lakh shares or 144.51% in Open Interest as rollover took place.

While taking a look at pattern analysis, as mentioned before, there is no structural breach on the Charts after yesterday’s decline in the Markets. It has kept its overall trend intact and continues to trade above its key support levels. However, given the technical indicators and the major events coming up this week, we will continue to see the Markets trading in a broad range.

All and all, though no major flipside expected one needs to be cautious as approach the Budget. By the time we approach this event, we can certainly expect volatility to remain ingrained in the Markets. Purchases should be kept very limited and selective while maintaining cautious outlook for the day.

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

Monday, February 23, 2015

Daily Market Trend Guide -- Monday, February 23, 2015

MARKET REPORT February 23, 2015

The Markets finally ended its gaining streak as it traded very much on expected lines as it consolidated and ended with losses. The markets saw a modestly negative opening and quickly lost some more ground in the morning trade while forming day’s low of 8816.30. Thereafter, the Markets traded entirely in the negative territory and did not see any significant pullback. The Market attempted to recover in the afternoon trade and made two feeble attempts to recover but continued to trade with losses as it saw no major move on the upside. Though the Markets have seen some amount of recovery but the last hour of the trade rapid paring of recovery once again. The Markets lost some more ground and ended the day at 8833.60, posting a net loss of 61.70 points or 0.69% while forming a near-parallel bar on the Daily Bar Charts.

MARKET TREND FOR MONDAY, FEBRUARY 23, 2015

Today, expect the Markets to once again start on a modestly positive note and look for directions. The Markets are likely to trade positive at least in the initial session but overall they are likely to continue to consolidate in a broad range as it did last week and it would be prone to volatile movements at higher levels.

The levels of 8870 and 8930 will act as resistance and the supports would come in at 8790 and 8750 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.2339 and it is neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD remains bullish trading above its signal line. On the Candles, An engulfing bearish line occurred (where a black candle's real body completely contains the previous white candle's real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NIFTY). It then signifies that the momentum may be slowing down and we might continue to see a potential top formation. On the Weekly Charts, the Weekly RSI is 67.2276 and this too remains neutral showing no bullish or bearish divergences or any failure swings. The Weekly MACD remains bullish trading above its signal line. The A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

On the derivative front, the NIFTY February futures shed over 19.34 lakh shares or 7.78% in Open Interest while the March futures added over 15.96 lakh shares or 61.48% in Open Interest.

Taking a cue from pattern analysis, the Markets are likely to continue to consolidate at higher levels and see volatile movements from here on with each rise. It would continue to resist to the upper rising trend line and is not likely to see a sharp and sustainable rise from its lifetime highs in the immediate short term unless it gets a strong shot from the Union Budget coming up this Saturday. Until this directional bias gets clear, it would be prone to profit taking from higher levels.

Overall, the Markets would continue to resist to its pattern resistance of the rising trend line and would remain vulnerable to the volatile movements and profit taking from higher levels. We continue to reiterate the policy of keeping exposures at moderate levels and continuing to protect gains in event of each rise in the Markets.