Gemstone Equity Research &amp; Advisory Services

+91-98250-16331

Thursday, February 21, 2013

Daily Market Trend Guide -- Thursday, February 13, 2013

MARKET TREND FOR TODAY February 21, 2013

The Markets had a little disappointing session amid lower volumes as it chose to consolidate as it pared all of its opening gains to end the day flat with negligible gains. The Markets opened little stronger on a positive note and gave its intraday high of 5971 in the early minutes of the trade. The Markets hovered above its pattern resistance of 5950 for the most part of the trading day but later slipped below that to trade flat. It continued to trade around its previous Close, heading nowhere again and finally ended the day absolutely flat at 5943.05, posting a negligible gain of 3.35 points or 0.06% though it formed a higher top and higher bottom on the Daily High Low charts. The pattern resistance of 5950 and it’s the 50-DMA of 5962.15 have currently held out as resistance for the Markets.

Today, the Markets shall open lower in line with the prevailing weakness in global Markets. Therefore with the opening below the 5950 levels, these levels will continue to act as a pattern resistance for the markets. The intraday trajectory would be crucial to decide the trend for the today.

For today, the levels of 5950 and 5962 shall continue to act as immediate resistance for the Markets. Supports come in near 5850-5835 levels on the downside. However, this will still keep the Markets in a broad trading range.

The lead indicators more or less paint a neutral picture with no directional triggers. The RSI—Relative Strength Index on the Daily Chart is 48.1568 is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD continues to trade below its signal line.

On the derivative front, NIFTY Futures have continued to add over 2.13 lakh shares or 1.35% in Open Interest. This certainly remains positive as it indicates that there was no unwinding reported while the Markets pared its gains. Shorts were though added.

The Markets have again added shorts while it pared its gains yesterday. It still continues to trade in 120-odd points trading range of 5835-5970 and there has been no breakdown still on Charts. However, the immediate resistance would be the levels of 5950 and 5932.15 at Close which is the 50-DMA of the Markets.

All and all, until the Markets moves past these levels, we will continue to see such volatile and bidirectional movements in the Markets with volatility ingrained in it. As we have mentioned in our previous editions, the Markets will have to move past these levels for sustainable up move. There are chances due to shorts that exists in system that we may see some improvement as we go ahead in the session later. Shorts should be avoided and any impending weakness should be used in making selective buying as selective out performance would be seen. Overall, cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, February 20, 2013

Daily Market Trend Guide -- Wednesday, February 20, 2013

MARKET TREND FOR TODAY February 20, 2013

After spending the most part of the session in totally flat and directionless manner, the Markets saw sharp recovery in the last hour and half of the trade and ended with smart gains. The Markets opened on a flat note and traded directionless heading nowhere until late afternoon trade. It kept moving in a very capped range and traded mildly negative as it gave its intraday low of 5883.15. However, the last hour and half of the trade saw sharp recovery as the Markets pulled back on back of short covering as well as some fresh buying. The Markets came into the positive territory and kept its sharp up move intact. It went on to give the day’s high of 5947.55 and finally ended the day at 5939.70, posting a smart gain of 41.50 points or 0.70% while forming a higher top and similar bottom on the Daily High Low Charts.

Today, the Markets are likely to open on a flat to moderately positive note and look for directions. The Markets is not completely out of woods and it will have to move past its pattern resistance of 5950-5955 levels and also need to close above its 50-DMA in order to have a sustainable reversal and up move. The intraday trajectory therefore will continue to remain critically important to decide the trend for today.

For today, the levels of 5950 and 5975 levels shall act as important resistance levels. The 50-DMA is 5961.26 and the Markets will have to close above those levels in order to continue with its up move.

The lead indicators paint a neutral picture. The RSI—Relative Strength Index on the Daily Chart is 47.5811 and it is neutral as it shows no failure swings or any bullish or bearish divergence. The Daily MACD continues to trade below its signal line.

On the derivative front, NIFTY Futures have added over 4.28 lakh shares in open interest. This is certainly a positive sign as it signifies that the rise that we saw yesterday was not merely because of short covering but also due to creation of fresh longs.

The Markets has its trend intact. However, as mentioned earlier, it will have to move past its patter resistance for a sustainable up move. Until this happens, possibility of a volatile range bound trade cannot be ruled out.

All and all, the Markets are likely to strengthen itself before the Union Budget. However, while not taking this for granted, it is advised to keep protecting profits at higher levels. Fresh positions can be created on selective basis while strictly avoiding shorts as the overall trend remains intact and the Markets have an upward bias. Cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, February 19, 2013

Daily Market Trend Guide -- Tuesday, February 19, 2013

MARKET TREND FOR TODAY February 19, 2013

The Markets had a quiet day yesterday as it opened on a flat note and then for most part of the session remain in rising trajectory and in the end, closed the day with nominal gains. The Markets opened on a flat note and dipped into the red to give the day’s low of 5878.45 in the very early minutes of the trade. Thereafter, the markets transformed themselves into rising trajectory and remained so until the end of the session and went on to give the day’s high of 5911. However in the last hour of the trade, the Markets pared some of its gains towards the end. It finally ended the day at 5898.20, posting a nominal gain of 10.80 points or 0.18% while forming a higher top and higher volumes on the Daily High Low Charts. The volumes remained much lesser yesterday.

Today is likely to be no different. Expect the Markets to open on a flat note again and continue to consolidate and trade in a range. The intraday trajectory would continue to remain important to decide the trend for today. The Markets have been lacking direction and conviction and this is resulting into it heading nowhere.

For today, the levels of 5950 and 5975 shall continue to act as immediate resistance. The supports come in at 5832.75 in form of 100-DMA.

The lead indicators show no directional triggers. The RSI—Relative Strength Index on the Daily Charts is 39.9037 and is neutral as it shows no bearish or bullish divergence or any kind of failure swings. The Daily MACD continues to trade below its signal line.

On the derivative front, NIFTY Futures continued to add nominal Open Interest. The NIFTY PC R stood at 0.93 as against 0.99.

Having said this, it is evident from the above reading that the Markets have been heading nowhere due to lack of any directional triggers. There is also lack of conviction on either side and this also evident by lower volumes that are being witnessed. It is clear that such trend would continue until Union Budget and the Markets may take any directional call only after that. Until this happens, the Markets may continue to remain and trade in a range.

All and all, until the Markets moves past the levels of 5950 again with volumes and conviction, only then we would see the Markets giving us a sustainable up move. Until then, we may continue to see such low volume directionless movements. However, it certainly has a limited downside due to heavy shorts that exists in the system. Any downside can be utilized for selective buying. Overall, neutral but cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,

+91-98250-16331