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Thursday, December 6, 2012

Daily Market Trend Guide -- Thursday, December 06, 2012

BRIEF MARKET FORECAST FOR THE DAY

Expect the Markets to open on a moderately positive note today. However, even with the Retail FDI issue sailing through the Loksabha in the distasteful manner, the Markets are still likely to remain in a range and continue to resist to its key resistance levels of 5940-5950 levels.

The lead indicators remain OVERBOUGHT. This overbought condition of the Markets shall keep the Markets away from moving past 5940-5950 levels. Until these levels are breached, sustainable up move shall not occur. In the present OVERBOUGHT conditions, aggressive longs should be avoided. Continuance of cautious outlook is advised. Chances of Markets paring some gains cannot be ruled out

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, December 5, 2012

Daily Market Trend Guide -- Wednesday, December 05, 2012

MARKET TREND FOR TODAY December 05, 2012

The Markets had a range bound but utterly volatile session as the Markets spent the entire session in a very capped range, but still ended the day with moderate gains on the recovery it saw in the last hour of the trade. The Markets opened moderately negative and after trading in a capped range, it inched up further. However, in the afternoon trade, it lost some ground, dipped into negative to give its intraday low of 5859. The Markets saw some last hour short covering towards the end. It attempted to recover from its lows, went in the green to give the day’s high of 5894.95. It came off a bit again from those levels and finally ended the day at 5889.25, posting a moderate gain of 18.30 points or 0.31% while forming a almost parallel bar on the Daily High Low charts.

Today, on back of flat to moderately positive global cues, expect a similar moderately positive opening in the Markets but for the first time, the lead indicators have started showing signs of potential short term weakness. The intraday trajectory that the Markets form shall continue to remain critically important and there are chances of weakness creeping in as we go ahead in the session.

For today, the levels of 5900 and 5930 shall act as immediate resistance and the supports come in much loser at 5825 and 5770.

The lead indicators point towards possibilities of short term weakness creeping in. The RSI—Relative Strength Index on the Daily Charts 71.6941 and is continues to remain in “OVERGOUGHT” territory. Though it does not show any failure swings, the NIFTY has set a new 14-day high but the RSI has not and this is “BEARISH DIVERGENCE”. The Daily MACD continues to trade above its signal line.

On the Candles, engulfing bullish pattern has occurred. If this occurs during an uptrend, which is the case with NIFTY, it may be a last engulfing top which indicates a potential top formation. However, this needs confirmation.

On the Derivative side, the NIFTY Futures Open Interest has remained almost unchanged with nominal addition of 0.19% or just over 36000 shares. The NIFTY PCR stands at 1.07 as against 1.10 yesterday.

All and all, the positive opening is likely but there are equal chances that we may see some weakness creeping in at later stage. It is very strongly recommended that the fresh buying in aggressive manner should be avoided. The Markets saw reactionary up move to the developments in parliament on retail FDI front, but still no sustainable up move shall occur until the Markets moves past 5930 levels. While avoiding fresh buys, cautious outlook is continued to be advised.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, December 4, 2012

Daily Market Trend Guide -- Tuesday, December 04, 2012

MARKET TREND FOR TODAY December 04, 2012

The Markets consolidated yesterday on expected lines, but it remained equally volatile and traded in a very tight range to end the day with minor losses. The Markets opened on a positive note and gave its intraday high of 5899.15 in the very early minutes of the trade. Thereafter, it transformed itself into falling trajectory and kept losing ground steadily, though with intermittent recovery bouts. The Markets attempted to recover to briefly trade into the green in the afternoon trade, but lost ground again go give day’s low of 5854.60. It again recovered from those levels and finally ended the day at 5870.95, posting a minor loss of 8.90 points or 0.15%, while still forming a higher top and higher bottom on the Daily High Low charts.

Today, expect the Markets to open on a moderately negative note and look for directions. The consolidation / corrective activity shall continue in the Markets and we are likely to see the Markets continue to correct. Though the trade may remain range bound with some volatility, intraday trajectory shall continue to remain critically important.

For today, the levels of 5900, 5925 shall continue to act as resistance while supports come in much lower at 5820 and 5760 levels.

Lead indicators point towards mixed trade with little more bias towards the possibility of consolidation / minor correction continuing. The RSI—Relative Strength Index on the Daily Chart is 70.5178 and it continues to trade in “OVERBOUGHT” territory while being neutral with no failure swings or bullish / bearish divergences. The Daily MACD continues to trade above its signal line.

On the Candles, A Spinning Top has occurred. When this occurs during a rally or near highs, which is the case with NIFTY, it shows possibility of a short term weakness creeping in to the Markets.

On the Derivatives side, the NIFTY futures has added little over 3 lakh shares or 1.58% in Open Interest whereas the turnover in the Derivative segments lowered significantly.

To sum up, the pattern analysis of the Charts, and with the Markets being in “OVERBOUGHT” territory, there are clear chances that we see the Markets continue with its corrective activities. No fresh up move shall occur until the Markets move past 5930 levels. Also, it shall closely watch the developments in the Parliament with voting of Retail FDI hanging in balance.

All and all, overall corrective activities shall continue and the Markets shall react to news on Retail FDI, and also no up move shall occur on technical grounds until the Markets move past the levels of 5930. Since currently the Markets are “OVERBOUGHT”, it is advised to refrain from fresh buying. Overall, continuance of cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, December 3, 2012

Daily Market Trend Guide -- Monday, December 03, 2012

MARKET TREND FOR TODAY December 03, 2012

The Markets had an yet another session on Friday, wherein it ended the day with a decent gain to take its tally of straight gains to over 250 points in last four sessions. The Markets opened on a quiet note and lost some ground after a quietly positive opening. However, the Markets continued to remain in the positive territory. Thereafter, the Markets reversed its intraday trend and until the end of the session, remained in upward rising channel. It went on to give the day’s high of 5885. It finally ended the day at 5879.85, posting a decent gain of 54.85 points or 0.94%, while continuing to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect the Markets to begin its day on a quietly positive note and look for directions. The Markets are now in “Overbought” territory and there are high degree of chances that we see some correction setting in. The intraday trajectory would be important to decide the trend for today.

For today, the levels of 5925 is the another major resistance to look for and the supports come in much lower at 5810 and 5770 levels.

The lead indicators are now in “Overbought” territory. The RSI—Relative Strength Index on the Daily Chart is 71.8665 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish / bearish divergence. But it now trades in “OVERBOUGHT” territory. The Daily MACD trades above its signal line. On the Weekly charts, the RSI is 67.3953 and shows no bullish / bearish divergence. The Weekly MACD continues to trade above its signal line.

On the Derivative side, the NIFTY December futures have added over 15 lakh shares or 8.49% in total open interest which is positive sign, but at the same time, the NIFTY PCR has gone up to 1.11 as against 1.06.

Given the pattern analysis of the Charts, the NIFTY is approaching a major resistance at 5925, just above 40-odd points from Friday’s close. Further to this , the Markets are any way currently in “OVERBOUGHT” territory. Even if the Markets continue to show buoyancy for a short time, there are high degree of chances that some correction sets in after a brief positive trade.

All and all, the Markets are now in “Overbought” territory. Any bullish up move that it continues to show should be not taken with a pinch of salt and high degree of caution is advised. It is highly recommended that fresh buys should be avoided at this juncture until the Markets see some consolidation / minor correction from this juncture, which is now due. Overall, heavily cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331