Gemstone Equity Research & Advisory Services

Friday, September 9, 2011

Daily Market Trend Guide -- Friday, September 09, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

Though remaining capped and range bound for most part of the session, the Markets managed to end yet another day with modest gain while continuing it s pullback and in the process have formed a slightly higher top and higher b bottom on the Daily High Low Charts.

Today, the Markets are again likely to open on a flat note and continue to consolidate like it did yesterday and look for directions. Since the Markets are likely to continue to consolidate, they shall continue to depend upon the intraday trajectory that the Markets will form.

With flat to mildly negative opening expected, the levels of 5170 and 5230 shall continue to act as resistance and the levels of 5115 and 5090 shall act as support. The behavior of the Markets vis-à-vis the levels of 5170 shall be critically important. This is because, as mentioned in our yesterday’s edition of Daily Market Trend Guide, the Markets have resisted precisely at those levels. For a sustainable pullback to continue, it would be critically important for the Markets to move past the levels of 5170 and trade above that.

The RSI—Relative Strength Index on the Daily Chart is 52.8114 and it does not show any negative divergence. It has reached its highest value in last 14-days and this is Bullish. On the Candles, though Spinning Top has occurred, the overall pattern remains Bullish.

The Daily MACD too continues to trade above its signal line.

The NIFTY Futures OI has shown minor shedding and the discount of 10-points has been replaced with premium of 2-points. This is due to short covering that we witnessed yesterday.

All and all, until the Markets comfortably moves past the levels of 5170, it is likely to continue to consolidate in a given range and remain slightly volatile. Though selective purchases may be made, the profits should be vigilantly protected at higher levels. While avoiding shorts, cautious optimism 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 8, 2011

Daily Market Trend Guide -- Thursday, September 08, 2011 (Published in the morning before the Markets opened)

MARKET TREND FOR TODAY

Though on low volumes, the Markets continued with its up move yesterday and remained in the rising trajectory for the entire session. It did come off its lows but still managed to end the day with decent gains and in the process forming a higher top and higher bottom on the Daily High Low Charts.

Today, we are likely to witness a session wherein the Markets are likely to consolidate. The Markets are likely to open on a flat note and are likely to remain in a very capped range and consolidate after decent pullback from its recent lows.

The Markets have resisted yesterday near the levels of 5170 mentioned in our yesterday’s edition of Daily Market Trend Guide. This is the Double Bottom support that the Markets broke while coming down and this likely to remain a temporary resistance until the Markets moves past this levels. The behavior of the Markets vis-à-vis this level would be critically important for the Markets to continue with its sustainable up move.

The RSI—Relative Strength Index on the Daily Chart is 51.1515. It does not show any negative divergence but the RSI has reached its highest value in last 14-days, which is Bullish. The Daily MACD continues to trade above its signal line and is bullish. On the Candles, A Rising Window has occurred. This usually implies continuation of Bullish trend.

The Markets have seen a pullback of almost 434 points from its days low in last couple of sessions. The NIFTY September future Open Interest remain virtually unchanged with the discount increasing to 7-points from 3-points. This implies minor addition of shorts along with long positions on very small scale.

All and all, with the levels of 5170 acting a immediate resistance, the Markets are likely to consolidate in a broad range of 4960-5170 levels. Intraday trajectory would continue to remain critically important. It is strongly advised to remain highly selective while picking stocks while vigilantly protecting profits at higher levels. Overall trend remains intact.