Gemstone Equity Research & Advisory Services

Thursday, February 26, 2015

Daily Market Trend Guide -- Thursday, February 26, 2015

MARKET REPORT February 26, 2015

What started off as a strong session for the Markets turned out to be yet another consolidation as the Markets pared all of its gains to end the day on an absolutely flat note. The Markets saw a decently strong opening and soon formed its intraday high at 8840.65 in the morning trade. The Markets more or less maintained these gains as it then traded in a capped range in sideways trajectory. It did lose some ground in the afternoon trade but the second half of the session saw sharp paring of gains. The Markets pared all of its gains and also dipped marginally into the red forming the day’s low of 8751.40. It finally ended the day at 8767.25, posting a net minor gain of 5.15 points or 0.06% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, FEBRUARY 26, 2015

Today, we enter into expiry of the current derivative series. Over and above all, we begin a three days of eventful remaining week as well. First Railway Budget from the current government comes up today later. The Markets are likely to open on a flat note and is expected to trade in a range and would see volatile movements as the proposals start pouring in. Coupled with this, being expiry today, we would continue to see the session heavily dominated with rollover centric activities.

The levels of 8870 and 8900 would act as immediate resistance for the Markets. The supports come in at 8730 and 8640 levels.

The RSI—Relative Strength Index on the Daily Chart is 55.2173 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish trading below its signal line.

On the derivative front, the NIFTY February futures shed over 33.41 lakh shares or 23.32% in OI wherein the March series added over 43.96 lakh shares or 28.61% in Open Interest. The rollovers have continued to remain higher than their 3-month average and indicate a bullish under tone.

Taking a cue from pattern analysis, the Markets, after pulling back from its 50-DMA levels, are continuing to consolidate below its rising trend line which would pose some resistance on its way up after 8940-levels. However, while doing this, the Markets are also in very cautious mode ahead of major economic event such as Union Budget. In event of any up move, the levels of 8900-8950 would pose pattern resistance fro the Markets. In event of any downside or in event of any major upside trigger, the Markets will continue to oscillate with the levels of 8640 acting as important support.

Overall, keeping the analysis more or less on similar lines, we continue to reiterate our advice to refrain from creating over-exposures in the Markets. Buying should be restrained to very selective stocks. While continuing to keep overall exposure at as much moderate levels as possible, cautious optimism is advised for the day.

Milan Vaishnav,

Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

+91-98250-16331

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com

Wednesday, February 25, 2015

Daily Market Trend Guide -- Wednesay, February 25, 2015

MARKET REPORT February 25, 2015

The Markets had a very flat and range bound session and it ended the day with minor gains after spending the entire session in sideways trajectory. The Markets saw a quiet and flat opening on expected lines as it opened modestly positive. Post this modest opening, the Markets continued to spend the first half of the session in a much capped range in sideways trajectory while going briefly into the negative zone couple of times. The afternoon trade saw some up move while the Markets formed the day’s high of 8800.50 but these levels were not sustained as the Markets pared those gains and traded flat again. It further dipped into negative and soon formed the day’s low of 8726.75. Once again, some recovery was seen and the Markets finally settled the day at 8762.10, posting minor gains of 7.15 points or 0.08% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR WEDNESDAY, FEBRUARY 25, 2015

Today, expect the Markets to open on a positive note and trade positive at least in the initial trade. We also enter into penultimate day of expiry of current February series and we would see the trading session continuing to remain dominated with rollover centric activities. The Markets are more or less likely to remain in a ranged consolidation in this heavily eventful week comprising of derivative series expiry, Railway Budget, Economic Survey and finally the Union Budget.

For today, the levels of 8820 and 8875 would act as resistance and the levels of 8726 and 8640 would act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 54.8950 and it is neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD remains bearish while trading below its signal line.

On the derivative front, the NIFTY February series shed over 38.24 lakh shares or 23.15% while March series added 51.17 lakh shares or 49.92% in Open Interest. NIFTY rollovers and Market wide rollovers have been above its 3-months average and buying from lower levels have been observed. NIFTY PCR stands at 0.85.

Coming to pattern analysis, the Markets have remained in a rising channel but after the decline on Monday, 23^rd of February; it has shown signs of mild weakness after some consolidation. It has formed, what is called in technical jargon, a “inadequate rise”, i.e. a top lower than its previous top which is its lifetime highs. Such formations either tend to alter the intermediate trend, or at least keeps the Markets in consolidation for some more time.

Overall, we continue to keep the analysis on the same lines. Until the Markets moves past 8900 levels, there will be no run-away rise in the Markets. The Markets would continue to oscillate in a broad trading range with the levels of 8640 acting as a major support. Though there will be no directional bias so long as it trades above 8640, the volatility would remain ingrained in the Markets. It is advised to continue to keep exposures at moderate levels, protect profits and approach the Markets with a cautious outlook today.