Gemstone Equity Research & Advisory Services

Friday, April 29, 2016

Daily Market Trend Guide -- Friday, April 29, 2016

MARKET TREND FOR FRIDAY, APRIL 29, 2016

The Markets traded precisely on analyzed lines yesterday. In absence of a clear breakout, the Markets continued to resist to its intermittent previous top. While it corrected sharply yesterday, it tested its 200-DMA as well. Today, we can expect the Markets to open on a weaker note and look for directions. Today’s possible negative opening will see the Markets opening below its 200-DMA which is 7853 and this level will continue to pose resistance to the Markets in days to come. The intraday trajectory that the Markets forms post opening will be crucial to watch out for.

For today, the levels of 7853 and 7920 will act as immediate resistance levels for today. The supports come in much lower at 7810 and 7740.

The RSI—Relative Strength Index on the Daily Chart is 57.3267 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD stays bullish as it trades above its signal line. However, it is moving towards a negative crossover in coming days if the Market conditions do not improve. On Candles, a big black candle has occurred. Since this has occurred near the resistance area, it has added credibility to the resistance.

On the derivative front, rollovers remained well above its 3-Month average. The NIFTY May futures witnessed rollovers of over 74% as against its 3-month average of 67%.

While having a look at pattern analysis, the Markets had formed an intermediate top of 7978 on April 21^st. Since then, it tested its 200-DMA twice. Tough it had reported a close very near to this level couple of days back, we had categorically mentioned that the Markets have not yet given a clear break out and this level will hold out as intermediate top until a clear breakout is seen. Yesterday, the Markets corrected once again from these levels and it did so sharply that it straightaway tested its 200-DMA. Today, with possibility of a lower opening once again, the Markets will find itself below the 200-DMA and this level will continue to pose resistance in the days to come. In case the weakness persists, further weakening of the Markets cannot be ruled out.

Overall, the Markets are showing distinct signs of weakness and some more weakness cannot be ruled out if the Markets closes below its 200-DMA. In such case, it is advised to keep purchase very stock specific and defensive and avoid absurd exposures. Overall, continuance of cautious outlook is advised for today.

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

Thursday, April 28, 2016

Daily Market Trend Guide -- Thursday, April 28, 2016

MARKET TREND FOR THURSDAY, APRIL 28, 2016

The Markets are once again likely to see a modestly start to the day. Today is the expiry day of the current derivative series and we will see the Markets remaining dominated to the rollover activities. The intraday trajectory that the Markets form would be critical to watch out for. The Markets are yet to give a clear breakout and though it has closed at the 2016 closing highs, clean break out is still awaited and in case of any up move, the Markets may test 8030-8040 levels wherein it will meet a pattern resistance.

For today, the levels of 7990 and 8040 will act as immediate resistance levels. The supports come in at 7940 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 68.2016 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 is bullish as it still rules above its signal line.

On the derivative front, the NIFTY April futures shed over 20.75 lakh shares or 17.61% in Open Interest whereas the May Futures added over 40.42 lakh shares or 34.22% in Open Interest.

Coming to pattern analysis, the Markets have not yet given a clear breakout. As mentioned in our yesterday’s edition, the Market took support at its 200-DMA which is 7856 today and have risen from there once again. However, it has not comprehensively breached its prior high of 7978 though it has ended a notch above it yesterday. The Markets are likely to continue to inch upwards and if this happens it may test 8030-8040 levels wherein it will once again meet another pattern resistance. If this does not happen, we will see the Markets consolidating once again with the levels of 200-DMA acting as support once again and we will see the Markets oscillating in 140-odd points range once again. The Markets have shown all the signs of fatigue in recent sessions and it would be important to see how it takes the expiry session.

Overall, it is important to note that the Markets are yet to have a clean break out and also it is showing some signs of fatigue. It certainly remains vulnerable to sharp sell-offs from higher levels and some intermittent profit taking bouts cannot be ruled out. Given the expiry day, volatility too might remain ingrained in the Markets. It is advised to refrain from taking any fresh positions until the directional bias gets clear and maintain cautious outlook for the day.