Gemstone Equity Research &amp; Advisory Services

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Thursday, August 2, 2012

Daily Market Trend Guide -- Thursday, August 02, 2012

We have not been able to publish Daily Market Trend Guide in regular PDF Format. We are re-producing the Text below. We sincerely regret the inconvenience caused.

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MARKET TREND FOR TODAY August 02, 2012

The Markets had a range-bound session yesterday wherein it positive consolidated on expected lines as it ended the day with moderate gains forming a higher top and higher bottom on the Daily High Low charts.

For today, again, the analysis would remain on more or less the same lines as the Markets are expected to open moderately positive and continue to move in capped range and consolidate. Only difference would be that they are approaching some minor resistance levels which it needs to guard against.

For today, the levels of 5258 and 5280 are immediate resistance levels. The support exists at 5210 and 5185 levels.

All lead indicators continue to remain in place. The RSI--Relative Strength Index on the Daily Chart is 56.11 and it is neutral as it shows no negative divergence or failure swings. the Daily MACD continues to trade below its signal line. The NIFTY and Stock Futures have continued to add in Total Open Interest.

The FED Meet yesterday remained an non-event as it continued its 0.00%-0.25% interest rate regime. Also it did not announce any new measures. However reducing of SLR by RBI has effective increased the liquidity supply and is likely to remain a positive factor. The another external event to watch for would be the ECB meet today.

All and all, the positive consolidation is likely to continue. The Markets are likely to remain little volatile and remain in a range. There are also chances that it slightly reacts at the resistance levels today. But with the indicators perfectly in place it would not be more than some consolidation as the undercurrent and the trend remains intact. It is advised to continue to make selective purchases. Overall, continuation of cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, August 1, 2012

Daily Market Trend Guide -- Wednesday, August 01, 2012

MARKET TREND FOR TODAY August 01, 2012

Yesterday was a day of positive consolidation in th Markets. The Markets opened on a moderately positive note, dipped lower and then smartly recovered to end the day with decent gains. The Markets opened on a mildly positive note and then briefly trading in the green, dipped in the negative and in the early afternoon session, went on to give the day’s low of 5154.05. However, in the second half of the session, the Markets staged a smart recovery after initial knee-jerk reactions to the RBI Announcements wherein it cut the SLR, rose again to trade in the positive territory. It went on to give the intraday high of 5234.55, and finally ended the day at 5229, posting a decent gain of 29.20 points or 0.56%. It has formed a higher top and higher bottom on the Daily High Low Charts.

Today’s analysis continues to remain more or less similar to that of yesterday. We can see positive consolidation in the Markets and this can keep the Markets little volatile, range bound but with upward bias. The two external events that the Markets would be watching out for is the Fed Meet today and the ECB meet tomorrow wherein, the zero rate regime and the liquidity infusion are expected to continue.

For today, the levels of 5250 and 5268 shall act as immediate resistance and the levels of 5195 and 5170 are expected to act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 55.16 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.

The FIIs have remained net buyer in Cash Segment and Derivatives segments. NIFTY and Stock futures have continued to add in total open interest.

Having said this, overall, positive consolidation is expected to continue. Any little bouts of weakness, or profit taking, as seen yesterday should be used in making selective purchases. Shorts should be avoided. Overall, positive optimism is advised as all indicators remain intact and bias remains positive.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, July 31, 2012

Daily Market Trend Guide -- Tuesday, July 31, 2012

We have not been able to publish Daily Market Trend Guide in regular PDF Format. We are re-producing the Text below. We sincerely regret the inconvenience caused.

____________________________________________________________________________________________________________________________________________

MARKET TREND FOR TODAY

The Markets had a robust session as it opened with a gap up opening, remained in positive rising trajectory and also ended the day with robust gains at 5199.80, posting gains of 99.95 points or 1.96%.

For today, expect a moderately positive opening again and expect the Markets to positively consolidate ahead of RBI Policy Announcements. The Markets shall open positive and then it is expected to move in a capped range and then react to the RBI Announcements.

For today, the levels of 5230 and 5265 are expected to act as immediate resistance.

The RSI--Relative Strength Index on the Daily Chart is 52.77 and it shows no negative divergence or failure swings. The Daily MACD still continues to trade below its signal line.

The NIFTY and Stock futures have continued to add the Open Interest, signifying continuation of long positions and no significant squaring off activities were seen.

Today, over 90% of the surveyed participants expect no cuts in Repo Rates. However, 25 bps of CRR cut is expected. There is less negative danger on the sentiment as the Markets shall go in with no expectations about rate cuts, but even a minor cut would be a positive surprise.

All and all, some consolidation would be seen around these levels and some knee-jerk reactions too may be seen. Overall, it is advised to continue with the current positions and selectively make purchases in case of any profit taking bouts. Shorts still should be avoided. Overall, positive optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, July 30, 2012

Daily Market Trend Guide -- Monday, July 30, 2012

MARKET TREND FOR TODAY July 30, 2012

After a scary session in the last hour and half on the expiry day, i.e. Thursday, the Markets opened on Friday with great strength on back of positive global cues and though it came off from its intraday highs, it still managed to end the day with decent gains. The Markets opened on a gap up opening and in the afternoon trade, went on to give the day’s high of 5149.95. In the second half of the session, it did came off from its highs, but still managed to end the day at 5099.85, posting a decent gain of 56.85 points or 1.13%. It has formed a higher top and sharply higher bottom on the Daily High Low Charts. On a Weekly note, the NIFTY has ended the day with net loss of 105.25 points or 2.01%.

Markets are again expected to open above the 200-DMA levels, the levels near which it has closed on Friday after dipping below it on Thursday. The Markets are likely to remain volatile due to two external events coming up – RBI Policy tomorrow and the FED (less important) meet the day after. RBI Policy announcement, especially, has kept the Markets selectively performing but the bullish undertone cannot be ruled out given that the global Markets have rallied almost 6% in last three sessions.

Today, the levels of 5150-5153 shall continue to act as resistance as its previous high and also the 100-DMA. The Markets shall open higher but intraday trajectory and maintaining opening gains would be again important. The levels of 5103, its 200-DMA is expected to act as immediate support, followed by 5065.

The RSI—Relative Strength Index on the Daily Chart is 43.1163 and it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line. On the Weekly Charts, the RSI is 47.8470 and it is neutral as it shows no negative divergence or failure swings. The Weekly MACD is bullish as it trades below its signal line.

The NIFTY and Stock Futures have continued to add Open Interest implying no significant short covering on Friday.

Amid this chaos, it is important to note that the Markets have underperformed due to, firstly, the expiry activity on Thursday, and also continuing caution ahead of RBI Policy announcement coming up tomorrow. Though 50% of the surveyed people do not expect any rate cut.

We wish to further point out that keeping our head in place is extremely important, especially when such chaotic conditions are prevailing. We reiterate that this is NOT a Market wherein we can aggressive short until it closes below its 200-DMA and ALSO its filters. Until that happens, the wisest thing that a retain investor can do is to hang on, and let such chaos pass through. The patience is being tested. It is important to note that this is the major reason for relative underperformance vis-à-vis the global markets.

All and all, such volatile conditions may prevail until a day or two more, but it is strongly advised to refrain from shorts until the Markets breaches the levels mentioned. The way, shorts should be refrained, aggressive additions to existing positions too should be avoided. It is best advised to maintain patience and liquidity and sit through such chaotic conditions. Overall, cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331