Gemstone Equity Research & Advisory Services

Friday, May 27, 2016

Daily Market Trend Guide -- Friday, May 27, 2016

MARKET TREND FOR FRIDAY, MAY 27, 2016

The Markets had a breakout yesterday and a day of yet another robust gain as it ended on a high note yesterday. Today, we can once again expect the Markets to open on a modestly positive note and look for directions. It is important to note that the Markets have gained over 320-odd points in two sessions and therefore some consolidation at higher levels cannot be ruled out. In fact, such consolidation is likely to be healthy in the long run.

For today, the levels of 8095 and 8165 will act as immediate resistance levels for the Markets. The supports come in lower at 7950 and 7910 levels.

The RSI—Relative Strength Index on the Daily Chart is 65.65.7510 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence on the Charts. The Daily MACD has reported a bullish crossover and is now bullish as it trades above its signal line.

On the derivative front, the NIFTY June series have added over 46.01 lakh shares or 30.90% in total Open Interest.

Coming to pattern analysis, the Markets have given a breakout after consolidating in a triangle for nearly a month. After resisting at its 200-DMA for couple of times and after oscillating with a support at its 50-DMA the Markets have broken out on the upside yesterday. Having said this, the technical structure and the lead indicators suggest likelihood of continuation of momentum on the Daily Charts. However, given the fact that the Markets have gained over 320-odd points in two straight sessions some amount of consolidation still cannot be ruled out. Speaking purely on technical grounds logical target of 8200 levels cannot be ruled out with lower band support of 7910.

Overall, momentum is likely to continue but at the same time some amount of consolidation cannot be ruled out. It is advised to completely avoid shorts at any nature continue to make selective purchases. Out performance from leading sectors will be seen as they are likely to support the overall momentum of the Markets. Positive 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, May 26, 2016

Daily Market Trend Guide -- Thursday, May 26, 2016

MARKET TREND FOR THURSDAY, MAY 26, 2016

Yesterday’s strong up move has thoroughly altered the short term structure of the Daily Charts. The Markets have now moved well beyond its 200-DMA and has further inched near its resistance zones of 7970-7990 levels. Today, we will again see some modestly positive opening and will see if the Markets achieve an breakout on the upside. The Markets will also remain heavily dominated with rollovers as today is the expiry of current derivative series.

The levels of 7990 and 8035 will act as immediate resistance levels for today. The supports come in much lower at 7910 and 7860 levels.

The RSI—Relative Strength Index on the Daily Chart is 59.4248 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 still bearish as it trades below its signal line.

On the derivative front, the NIFTY May futures have shed over 21.61 lakh shares or 15.81% in Open Interest. The June futures added over 62.30 lakh shares or 71.99% in Open Interest.

Coming to pattern analysis, with the yesterday’s strong up move, the overall structure of the Daily Charts have altered a bit. The Markets still continue to remain in a triangle formation but its range is widened and also because of that, it trades exactly around 3/4^th of its apex. Having said this, it has also moved past its 200-DMA yesterday and now trades around its pattern resistance. Any higher opening today will result into an attempted breakout for the Markets on the up side if they open positive and manage to sustain above that.

Overall, the Markets rest at interesting juncture. Speaking purely on technical lines, the Markets are likely to see a modestly positive opening and if it capitalizes on this, it may achieve a possible breakout on the upside. However, the opening levels and some advancement will take the Markets around its resistance zones of 7970-7990 levels and it would be critically important to see how the Markets deals with these levels. While continuing to avoid shorts even at higher levels, selective purchases may be made.