Gemstone Equity Research & Advisory Services

Sunday, September 18, 2011

Daily Market Trend Guide -- Friday, September 16, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday consolidated in a capped range for half of the session, but again saw a pullback in the second half as it managed to end the day with decent gains forming a higher top and higher bottom on the Daily High Low Charts.

For today, we may see the Markets opening on a positive note and continue with its up move at least in the initial trade.

The RBI shall announce Rates today and 25 bps of the rate is discounted for by the Markets and anything above this shall seriously harm the sentiments in the immediate term.

The Markets shall open on a positive note and shall trade in a range until Rates are announced and then react to it. Then once the Rates are announced, it shall react to it.

For today, the levels of 5105 and 5170 shall act as resistance and the levels of 5030 and 4990 are immediate supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 49.8477 and it is neutral as it shows no negative divergence or failure swings.

The Daily MACD continues to remain bullish as it trades above its signal line.

All lead indicators continue to point towards continuing pullback. The FIIs and DIIs have also continued to remain net buyers. However, NIFTY Futures have been showing net decline in Open Interest since previous two sessions. This implies that the up moves that we have seen has been more due to short covering rather than fresh buying. It is critically important that this gets replaced with fresh buying. The levels of 5170 shall continue to act as major pattern resistance and it would be critically important that to confirm a trend reversal, the Markets will have to move past this levels. Until this happens, we will continue to see the Markets trading in a broad volatile range. All and all, it is advised to continue with the stock specific approach and also protect profits at higher levels while avoiding shorts. Cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
http://www.mymoneyplant.co.in/
+91-9825016331
milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Thursday, September 15, 2011

Daily Market Trend Guide -- Thursday, September 15, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets yesterday had an remarkable session, wherein, after spending the morning trade in a range bound volatile manner, it saw recovery in the later part of the day to end the day with decent gains, and in the process the Markets have formed higher top and similar bottom on the Daily High Low Charts.

For today, expect the Markets to open on a mildly positive note and look for directions, and the intraday trajectory shall continue to play critically important to decide the trend for today, along with the volumes.

With the Markets expected to open on a mildly positive note and trade positive at least in the initial trade, the levels of 5045 and 5090 shall act as resistance and the levels of 4980 and 4955 are expected to act as supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 45.9497 and continues to remain neutral as it shows no negative divergence or failure swings.

The Daily MACD continues to remain bullish as it trades above its signal line.

The Markets saw the recovery coming in on back of much higher volumes than the previous session, which, in a way is a positive sign for the Markets. Both FIIs and DIIs have remained net buyers in Equities.

The Markets have formed almost similar bottoms in last three sessions which shows the support coming in at these levels and after pullback from these levels, there is discomfort seen at these lower levels. Yesterday’s pullback has seen decrease in Open Interest in Nifty futures which indicates it was heavy short covering and this levels is likely to act as immediate support.

All and all, it is important to see if this short covering gets replaced with fresh longs. Until Markets reacts to RBI announcements yesterday, it is likely to remain in a range and also bit volatile. Overall, cautious optimism is advised for today.