Friday, April 8, 2011

Daily Market Trend Guide -- Friday, April, 08, 2011

MARKET TREND FOR TODAY

The Markets continued to consolidate yesterday also though it showed some intraday resilience but ended with and in the process have formed a sharply lower top and lower bottom on the Daily High Low Charts.
Today, expect the Markets to open on a mildly negative note and look for directions.

With the Markets expected to open on a mildly negative note, the levels of 5925-5935 have now become temporary top an they will continue to act as immediate resistances.

For today, the levels of 5925-5940 shall act as resistance and the levels of 5830 and 5790 shall act as supports. Yesterday, the Markets have shown some definite signs of impending weakness though it
has been best trying to avoid it.

The RSI—Relative Strength Index on the Daily Chart is 68.5841 and it has given a sell signal a day ago. It continues to remain neutral as no negative divergences or failure swings are seen. The Daily MACD continues to trade above its signal line.

As mentioned, the Markets now shows some definite signs of weariness and impending correction. On the Candles, A Spinning Top has occurred. During a rally, as in present case, it signifies the loss of price momentum. Further three black candles were formed in last three days. Though they were not big enough to create three black crows the steady downward pattern is bearish. Also, the Close of the NIFTY is below the Chart pattern resistance of falling trend line.

Given all this, the reading goes that even though the Markets show some intraday resilience, the steady pattern remains bearish. Fresh longs should be either very stock specific with strict protection of profits at higher levels or only when the Markets moves past the 5940 levels. Until then, stock specific approach with high degree of caution is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in

+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com

Thursday, April 7, 2011

Daily Market Trend Guide -- Thursday, April 07, 2011

MARKET TREND FOR TODAY


The Markets yesterday showed some first signs of correction slightly creeping in as it closed with minor losses but still managed to form a slightly higher top and higher bottom on the Daily High Low Charts.
The Markets have closed near the low point of the day and thus, it is likely that the weakness shall persist in the Markets, at least in the initial session.

The Markets are likely to give a flat to mildly negative opening today and look for directions. Today’s behavior of the Markets would be critical to confirm the Markets entering into consolidation / correction stage as today’s session may see negative crossover of 100 and 200 DMAs which are now equal.

With the markets expected to open on a flat to mildly negative note, the levels of 5925, 5940 shall act as resistance and the levels of 5845 and 5805 shall act as supports.

The RSI—Relative Strength Index on the Daily Charts is 69.2237. This lead indicators has moved out /down from its OVERBOUGHT area and has given a SELL signal. The Daily MACD continues to trade above its signal line.

Though the Markets have added in net Open Interest, the Open Interest has come down from its intraday highs and the premiums too shrunk intraday day. This translates into offloading of longs and also some creation of fresh shorts in the system. Today’s trend would largely dependupon the intraday trajectory that the Markets form. Even if initial positivity is seen in the Markets, the chart pattern as well as the other technicals suggest that the correction may continue in the Markets.

All and all, with the Markets likely to continue to remain in corrective phase, extreme caution is advised while taking fresh longs with highly stock specific approach. Overall, continuation of cautious outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com

Wednesday, April 6, 2011

Daily Market Trend Guide -- Wednesday, April 06, 2011

MARKET TREND FOR TODAY


The Markets yesterday saw some signs of profit taking and correction setting in but that remained intraday as the Markets recovered from its lows to end the day flat and in the process have formed a almost parallel bar with slightly higher top and higher bottom on the Daily High Low charts.

For today, expect the Markets to open on a flat to moderately positive note again and look for directions.

With the Markets expected to open flat to moderately positive, the levels of 5925 and 5940 shall continue to act as resistance. We had categorically mentioned the levels of 5925 acting as Pattern Resistance and the Markets resisted there yesterday and made a high of 5928.65. This range, i.e. 5925-5935 shall continue to remain and act as resistance until this is significantly breached on the upside.

The RSI—Relative Strength Index on the Daily Chart is 71.0859 and it has reached its highest level in 14-days. But at the same time, it is  in OVERBOUGHT territory. The Daily MACD continues to trade above its signal line. On Candles,
A long lower shadow occurred but it is irrelevant as it has occurred during a rally.

The Markets have failed to breach the levels of 5925-5935 as mentioned and any sustainable up move shall come only if the Markets move past and sustain and trade above those levels. With the RSI  OVERBOUGHT, the sustenance above the resistance levels is technically unlikely. Therefore, any blatant longs either in NIFTY or NIFTY Components may prove risky as it has total adverse risk reward ratio. The Markets badly needs to either correct or at least consolidate before any further up move as such up moves are definitely getting unhealthier for investors as such sharp up moves see equally sharp corrections. It is thus advised to remain ultra stock specific in purchases and maintain highly cautious outlook for the day.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com

Tuesday, April 5, 2011

Daily Market Trend Guide

MARKET TREND FOR TODAY


After a day of breather, the markets again ended the day with gains reaching its three month high and in the process have given a sharply higher top and bottom on the Daily High Low Charts. For today,  expect to see a flat opening in the Markets. With the flat opening in the Markets, the levels of 5925 and 5950 shall act as resistance and the levels of 5840 and 5775 may act as immediate supports.

The Markets have risen some 650 odd points and some 2250+ points Sensex in past 9-10 sessions practically without any break. Further to this, it has done so purely on liquidity driven scenario defying some major technical resistances as if they never existed and in the process have certainly put retail investors / traders at risk at these levels. The RSI—Relative Strength Index on the Daily Chart is now 71.0226 and is now in OVERBOUGHT range.

In further to this, the Markets have now closed at a Patter Resistance in form of a falling Trend line formed by joining tops from 6335 levels which joins 6181 levels. Today, behavior of the Markets will depend upon its opening above the levels of 5925 and sustaining above it.

Having said this, it would be greatly unhealthy for the Markets with high risk element involved if its continues to rise in spite of major Pattern Resistance and the lead indicators being OVERBOUGHT. This certainly has a danger of getting the retail / small investor getting trapped on the wrong side of trade if one continues to get carried away felling left out from the rally.

It is strongly advised at these levels to avoid direct long positions in NIFTY and NIFTY Components until we see some correction / consolidation on a serious note as this is now getting hazardous. It is rather advised to concentrate on stock specific opportunity while protecting profit at higher levels. High degree of caution is advised for today.
  

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in 
+91-9825016331

milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com

Monday, April 4, 2011

Daily Market Analysis -- Follow Up

Daily Market Analysis -- Follow up

The Markets today, after showing some initial signs of weariness in the early morning, continued its relentless up move defying all factorts, chart patterns as well as technicals to closed again with robust gains.

At this juncture, we would lile to point out that the rally that we have been seeing is purely liquidity driven and any such rally, or a rise of as much as 650 points NIFTY or around 2300 points of Senxes, without any correction practically, is certainly has all the potential to turn into a nightmare for retail / smaller investors.

When FIIs start selling, they usually defy all technicals. Same is the case with when they continue to buy driven by liquidity. In present case, we have been seeing Markets rise defying all Chart Pattern and all technical readings on the Charts. This is enough proof that once this buying stops, there are all chances that the small / retail investor who might have made purchases after feeling little left out may get trapped at higher levels.

Analysing the present scenario, the Markets have given a sharp higher top and higher bottom after giving a Spinning Top Formation on the Candles, which on the contrary signals a potential reversal from the top or a top formation.

At this juncture, one must not fail to read certain facts. First, with this, the Markets have touched the falling trend line which is drawn from the 6335.90 levels joining the levels of 6181.45. So, the Markets have Closed near a Pattern Resistance. Secondly, even with this relentless rise, the 100 DMA of the Markets has continued to decline and is now all set to cut 200 DMA from above giving a negative crossover. The falling of 100 DMA inspite of such rise in the Markets is yet another sign of an unnatural rally. Thirdly, with today's Close, the RSI on the Daily Chart has become OVERBOUGHT as it is now in overbought territory.

Given the above reading, much would depend upon the Markets opening above its resistance levels of 5925 an sustaining above that levels. BUT, under any case, any further upmove has become completely unhealthy and unsustainable. We would like to clearly advise against taking any fresh long positions until the Charts are in shape and the Markets see some consolidation / correction from these levels.

These Markets levels, especially when the rise having come in this manner, we see our duty to paint a correct technical picture as this rise is neither support with Chart Pattern Analysis, nor any other technical factors. We see this our duty to paint a correct picture of the Markets in larger interest of retail investors, who are most likely to get carried away into further longs seeing such rise.

On the contrary, the  best strategy in such Markets which are seeing unnatural fuelling would be  to keep away from taking any direct NIFTY long positions but rather concentrate on stock specific opportunities.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331

milanvaishnav@mymoneyplant.co.in 
milanvaishnav@yahoo.com

Daily Market Trend Guide -- Monday, April 04, 2011

MARKET TREND FOR TODAY


After eight straight days of gains, the Markets finally showed some signs of weariness / consolidation as it ended the day with negligible losses and in the process have formed a lower top but higher bottom on the Daily High Low Charts.

Today, following the positive closing in the US Markets and stable trading Asian Markets, we are likely to see a positive opening again in the Markets after a day of consolidation.

However, even with the Markets expected to give a positive opening, given its technicals, the trend would continue to depend again on the intraday trajectory that it forms. For today, the levels of 5872 and 5910 shall act as resistance and the levels of 5775 and 5710 shall act as immediate supports. The RSI—Relative Strength Index on the Daily Chart is 67.6349 and is neutral as it shows no negative divergence or a failure swing. The Daily MACD continues to trade above its signal line.

On Candles,
A Spinning Top has occurred. During a rally, (which is the case with NIFTY), this is a typical sign that potentially signals the loss of momentum in the Markets and some likelihood of beginning of Correction. On the Weekly Charts, the Weekly MACD is BEARISH as it trades below its signal line, however the RSI Continues to remain neutral.

Given this reading, the Markets have taken a breather as expected in our Friday’s edition of Daily Market Trend Guide. Even with positive global cues, the Markets are overdue for correction / consolidation given both, the technical and chart pattern analysis of the Markets. Today, there are all chances that the Markets may give positive opening  but later comes back in consolidation / correction mode after a brief intraday high. All and all, as in last couple of days, we continue to sound caution at these levels and structure in the Markets. Continuation of cautious approach while avoiding longs is advised for today.
  

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
+91-9825016331

milanvaishnav@mymoneyplant.co.in
milanvaishnav@yahoo.com