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The Markets yesterday ended on a nervous note ahead of RBI policy review and rate announcement and ended the day with losses forming lower top and lower bottom on the Daily High Low Charts.
For today, following global weakness and prevailing domestic caution, expect the Markets to open on a lower note. With the Markets expected to open on a lower note, while depending upon the intraday trajectory it forms may spend the session recovering in the second half.
For today, the levels of 5475 and 5525 shall act as resistance and the levels of 5405 and 5380 shall act as support levels.
The RSI—Relative Strength Index on the Daily Chart is 42.3886 and it does not show any negative divergence. However, it has reached its lowest value in last 14 days which is bearish. On the other hand, the Daily MACD continues to trade above its signal line and is therefore bullish.
The Markets have been trading extremely range bound and with relatively much lower volumes on concerns of inflation and the RBI’s stand vis-à-vis it and today, it is very much likely to react to the triggers.
The rate hike of 25 bps is almost discounted in these prices. Secondly, the Markets have added massive Open Interest in last couple of sessions and have wiped out the premium on NIFTY Futures indicating heavy creation of shorts. Furthermore, the advance tax payment numbers have almost negated the fears of slow down.
All this reading, and the reading of the technicals suggest it at all there is a weakness, it may be temporary one. There are chances of markets opening lower and recovering later. The lower levels may be used for making selective purchases. Positive caution is advised for today.
The Markets yesterday ended the day with modest gains as it ended it four day losing streak and in the process have formed a higher top and higher bottom on the Daily High Low Charts.
For today, expect the Markets to open on a flat to mildly positive note and look for directions. With the Markets expected to open on a flat to mildly positive note, the levels of 5550 and 5575 will continue to act as resistance and the levels of 5480 and 5460 are expected to act as supports.
The Markets have been trading in a capped and narrow range since last couple of sessions and today is expected to be no different as the Markets continues to await to the new triggers expected in form of RBI rate announcements in its mid term policy review and possible diesel price hike.
The lead indicators still continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 47.3121 and it shows no negative divergence or failure swing and is therefore neutral. The Daily MACD continues to trade above its signal line.
The Markets have been quietly adding Open Interest since last couple of sessions. However, due to lack of participation and volumes, any up move is not being sustained and at the same time no downside is comfortable either. The Markets are expected to react to the triggers mentioned earlier and until this happens, there are all chances that it continues to remain in range and remains volatile. All and all, it is advised to avoid shorts until critical levels are broken as much of the expected triggers are discounted at current price. Weakness will be seen only if more than discounted triggers come. Stock specific purchases may be made. Positively cautious outlook is advised for today.