Gemstone Equity Research & Advisory Services

Wednesday, April 13, 2016

Daily Market Trend Guide -- Wednesday, April 13, 2016

MARKET TREND FOR WEDNESDAY, APRIL 13, 2016

The Markets are likely to open on a decently positive note following stable Global cues. With this, the Markets may attempt to move past the resistance zone of 7700-7730 levels. However, it would be thoroughly important to see that the Markets maintain its expected opening gains and capitalize on it. It is also important to note that we once again have a short week with tomorrow and day-after-tomorrow being holidays on account of Dr. Ambedkar Jayanti and Ram Navmi respectively.

For today, the levels of 7730 and 7775 will act as immediate resistance levels for the Markets. Supports come in much lower at 7660 and 7610 levels.

The RSI—Relative Strength Index on the Daily Chart is 58.8997 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is still bearish as it trades below its signal line.

On the derivative front, the NIFTY April futures have shed over 5.07 lakh shares or 3.30% in Open Interest. The NIFTY PCR stands at 0.86 as against 0.83 levels.

Coming to pattern analysis, the Markets will attempt to move past the pattern resistance zone of 7700-7730 levels. It will have a minor resistance at 7775 levels. However, apart from all this, the key thing would be the ability of the Markets to capitalize on the expected positive opening. It would be very essential for the Markets to maintain the expected opening gains and continue with the up move. However, the consistently declining Open Interest with every up move certainly raises a question mark on the sustainability of the up moves.

Overall, we continue to reiterate that all the up moves should be utilized to protect and book profits. New positions should be created but the quantity should be kept moderated and purchases should be done on highly selective basis. More emphasis should be laid on booking / protecting profits at higher levels. We continue to reiterate to maintain cautious outlook on the Markets.

Milan Vaishnav,

Consulting Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

www.EquityResearch.asia

http://milan-vaishnav.blogspot.com

+91-98250-16331

milan.vaishnav@equityresearch.asia

milanvaishnav@yahoo.com

Tuesday, April 12, 2016

Daily Market Trend Guide -- Tuesday, April 12, 2016

MARKET TREND FOR TUESDAY, April 12, 2016

Markets are likely to open on a flat note again. However, given that the Markets have ended near the high point of the day and in absence of any negative triggers, the Markets are likely to continue with its up move at least in the initial trade. However, speaking purely on technical terms, the Markets still continue to remain in a broadly defined trading range and still trades below its important pattern resistance.

For today, the levels of 7700 and 7725 will act as immediate resistance levels for today. The supports come in at 7650 and 7590 levels.

The RSI—Relative Strength Index on the Daily Chart is 56.9579 and it remains neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD stays bearish as it trades below its signal line.

On the derivative front, the NIFTY April futures have shed over 3.15 lakh shares or 2.01% in Open Interest. This makes very much evident the amount of short covering that was witnessed from lower levels. The NIFTY PCR stands at 0.83 as against 0.73.

Coming to pattern analysis, the levels of 100—DMA and the pattern support near 7550 have acted as supports for the Markets for the immediate short term. The way the sloping trend line have acted as stiff resistance at levels 7700 and above, the pattern support at 7550 and the 100-DMA have held out as support at Close levels. Having said this, if we presume that the falling trend line continues to pose resistance for the Markets at levels 7700 and above, we will see the Markets consolidating with falling tops and a flat support. This may see a formation of Descending Triangle on the Daily Charts.However, this would be too early to comment. But as of now, the levels of 7700 and upwards will continue to act as stiff pattern resistance to the Markets.

Overall, the Markets will also remain cautious to the IIP and March CPI numbers that would come up later in the day today after the Market hours. The Markets still rules in a range below its pattern resistance. We reiterate that one should not get carried away with yesterday’s rise and use any up move that we witness to book and protected profits rather than creating any fresh positions. Continuance of cautious outlook is advised for today.