Gemstone Equity Research & Advisory Services

Monday, July 6, 2015

Daily Market Trend Guide -- Monday, July 06, 2015

MARKET REPORT July 06, 2015

Markets had an overall stable session on Friday as it spent the day in a sideways trajectory and remained range bound but ended the day with modest gains. The Markets saw a flat opening and soon strengthened in the morning trade to form the day’s high of 8497.75. Since formation of this level, the Markets transformed itself into a small trading range and remained in the 25-odd points range for the rest of the day. It did come off a bit in the afternoon trade but recovered again to trade around its morning highs. The Markets finally ended the day at 8484.90, posting a net gain of 40 points or 0.47% while forming a higher top and slightly lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, JULY 06, 2015

Even with everything remaining perfect on domestic and technical grounds, the Markets shall open today reacting to a “NO” vote in the Greek Referendum rejecting the bail out package offered by its international creditors. This will see the Markets opening just above its 200-DMA moving average. Fundamentally speaking, India would be one of the least affected nations and therefore we can certainly hope that this remains just a sentimental knee-jerk reaction. There are chances that we see this downsides resulting into bargain buying later in the day.

For today, the levels of 851 and 8565 are immediate resistance for the Markets. The supports come in at 8375 and 8340 levels.

The RSI—Relative Strength Index on the Daily Chart is 63.1856 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 remains bullish as it trades above its signal line. On the Weekly Chart, the Weekly RSI is 53.3310 and is neutral showing no bullish or bearish divergence or any failure swing. The Weekly MACD is bearish as it trades below its signal line. However, it is attempting a positive crossover and we might see it turning bullish next week.

On the derivative front, NIFTY July futures have added yet another 3.84 lakh shares or 2.27% in Open Interest. This signifies continuation of bullish momentum in the Markets. The NIFTY PCR stands at 1.11 as against 1.09.

Coming to the pattern analysis, the Markets have attempted to move past its 100-DMA as well (which trades above its 200-DMA) and had closed just a notch above it. However, today’s likely downside opening will once again bring it in the range of 200-DMA on the lower side and 100-DMA. Today’s likely negative opening will see the Markets trading near its 200-DMA again and it would be crucially and critically important that the Markets do not breach the 200-DMA levels. On the weekly Chart, last week, the Markets have managed to move above the falling channel resistance and is likely to gather upward momentum next week.

Overall, it is very much likely that the today’s nearly imminent negative opening remains temporary and just a knee-jerk reaction. There are great chances that the Markets reduces its losses and improves as we go ahead in the session. Any downside should be used for selective buying but at the same time, adequate liquidity should also be provided for in order to deal with some moderate amount of volatility that shall be seen ingrained in the Markets.

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

Friday, July 3, 2015

Daily Market Trend Guide -- Friday, July 03, 2015

MARKET REPORT July 03, 2015

The Markets had a very range bound session yesterday as it chose to consolidate after pullbacks as it ended the day on a very minor loss. The Markets saw opening much on expected lines which was very flat. Post flat opening the Market soon slipped modestly into negative. Soon it managed to crawl back into positive territory and went on to form the day’s high of 8479.25. The Markets continued to resist to its 100-DMA levels and came off from the high point of the day. It also went on to slip into negative and formed day’s low of 8433.20. After spending the entire session in 43-odd points range, the Markets finally settled the day at 8444.90, posting a minor loss of 8.15 points or 0.10% while forming a similar top but higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JULY 03, 2015

The Markets have continued to resist to its 100-DMA levels and it is likely to continue to do so today as well. We can expect a quiet opening in the Markets and the Markets are likely to exhibit a ranged trade today and some amount of caution will clearly prevail over the weekend ahead of out come of the Greek Referendum. However, this will be a range bound caution with no major downside expected until something totally unexpected comes out from the global arena.

The levels of 8471 and 8525 will act as immediate resistance for the Markets. The supports will come in at 8420 and 8376 levels.

The RSI—Relative Strength Index on the Daily Chart is 61.14048 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to remain bullish as it trades above its signal line.

On the derivative front, NIFTY July futures have shed 50,300 shares or a nominal 0.30% in Open Interest. This does not signify any major reduction of positions on either side.

Coming back to pattern analysis, the Markets have consolidated after moving past the 200-DMA. It has done so after forming a higher bottom post taking support near 7950-8000 zones. It would not be a surprise that the Markets may consolidate a bit more but in any case the levels of 200-DMA should continue to exist as a import support for the Markets if it has to confirm the bottoms that it has made in recent past.

Overall, the Markets are likely to exhibit a range bound trade and some amount of caution is certainly to weigh in on account of a weekend. However, if we see the underlying data, the Markets are looking for a slight trigger and they may see resuming their up move in the next week. The eyes are on the developments in Greece and in absence of any negative news flow, the technical indicators clearly suggest that we may see some more up sides in the Markets. As of today, cautious outlook with very modest stock specific action is advised.