Gemstone Equity Research & Advisory Services

Monday, May 25, 2015

Daily Market Trend Guide -- Monday, May 25, 2015

MARKET REPORT May 25, 2015

The Markets continued with its up move on Friday as well and ended the day with modest gains but at the same time, it did so in a bit reluctant manner. The Markets saw a quiet and positive opening on expected lines and in the first half of the session it remained in upward rising channel and remained in positive territory. After stable opening, the morning trade saw some strength in the Markets and it kept on making fresh gradual highs while demonstrating some strength. By afternoon trade, the Markets saw some continuing stability while it formed the day’s high of 8489.55. However, the second half of the trade saw some paring of gains. Markets came off from its intraday highs and pared nearly half of its gains. Though it did not dip into the negative, it finally ended the day at 8458.95, posting a modest gain of 37.95 points or 0.45% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, MAY 25, 2015

We can expect a muted start to the Markets today. The Markets may open on a very quiet note and might continue to trade in a given range while showing little negative bias. Though all cues remain positive some amount of minor weakness may be seen because of some stock specific pressure that we might see today. Today, we also enter into expiry week and therefore we can expect bulk of the activities being dominated with rollover centric actions.

For today, the levels of 8470 and 8550 will act as immediate resistance for the Markets. The supports would come in at 8380 and 8320 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.9866 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. Daily MACD remains bullish as it trades above its signal line. On the Weekly Chart, Weekly RSI is 51.6538 and it remains neutral showing no bullish or bearish divergence or any failure swings. Weekly MACD continues to remain bearish as it trades below its signal line.

On the derivative front, NIFTY May futures have shed over 2.79 lakh shares or 2.12% in Open Interest. NIFTY June Futures have added over 12.70 lakh shares or 50.3.5% in the OI. NIFTY PCR stands at 1.11.

Looking at pattern analysis, the Markets have resisted to its 50-DMA at Close levels and this level is likely to continue to act as resistance in the immediate short term followed by the 100-DMA. On the Daily Chart, there is slight structural weakness as the 50-DMA has cut 100-DMA from above couple of sessions back and this may infuse some very short term weakness for the Markets. Having said this, in event of any weakness, the Markets may not show any significant downside but may continue to trade in a broad trading range with the levels of 200-DMA acting as major support. On the Weekly Charts, all DMAs remain positive and the Markets continue to trade above all of its DMAs.

All and all, keeping this in view, the Markets may not still completely be out of woods. It has continued to face shortage of delivery based buying. At the same time the lead indicators and other factors do not present any significantly negative cues as well. While remaining dominated with rollover centric activities in the coming days, it would continue to show some stock specific out performance. Overall, with no major downsides expected, ranged consolidation is likely to continue in the Markets.

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

Friday, May 22, 2015

Daily Market Trend Guide -- Friday, May 22, 2015

MARKET REPORT May 22,2015

The Markets consolidated in yesterday session as it swung on either side but ended on absolutely flat note after recovering from its lows. The Markets saw near –flat opening but soon formed its intraday high of 8446.35 in the very early minutes of the trade. However, the Markets soon came off from its highs and saw some rapid paring of gains and formed the day’s low of 8382.50 in the late morning trade, coming off nearly 65-odd points from the high point of the day. The Markets attempted to find its bottom again as it saw some recovery coming in and it managed to recover all of its gains and also went into positive territory by afternoon session. No major movement was seen and the Markets spent rest of the session heading nowhere. It finally ended the day at 8421, posting a very minor loss of 2.25 points or 0.03% while forming a near parallel bar on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, MAY 22, 2015

Today’s analysis continues to remain more or less on similar lines. Expect the Markets to open on a flat to mildly negative note and look for directions. Though quiet opening is expected, the Markets will continue to trade in a capped range and some volatility like yesterday cannot be ruled out. The Markets are consolidating going near to its 50-DMA and

though such consolidations are healthy, it would be crucial for the Markets to continue with their up move especially given the expiry in the next week.

For today, the levels of 8475 and 8540 will act as immediate resistance levels for the Markets. The supports come in at 8315 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.1863 and it remains neutral showing no bullish or bearish divergence or any failure swing. The Daily MACD continues to remain bullish trading above its signal line.

On the derivative front, NIFTY May futures have shed over 4.39 lakh shares or 3.23% in Open Interest. Though we can attribute this to short covering, merely attributing this singularly to short covering will not be proper as some amount of rollovers too have begun.

Coming to pattern analysis, the reading remains similar to that of yesterday. After moving past the levels of 200-DMA, the Markets are showing sideways consolidation and in the process, the two immediate resistance for it are its 50 and 100-DMA respectively. Though such consolidation is healthy, it would now be crucial for the Markets to move past these levels. Until this happens ranged consolidation is expected to continue with the levels of 200-DMA expected to act as support.

All and all, keeping the overall analysis on the similar lines that of yesterday, the Markets may see ranged movement post negative opening and intermittent bouts of weakness cannot be ruled out. Some purchase may be made as sector specific out performance would be seen but overall, maintenance of caution at higher levels is advised.