Friday, August 26, 2011

Daily Market Trend Guide -- Friday, August 26, 2011 (Puablished in the morning before the Markets opened)


MARKET TREND FOR TODAY

The Markets had a session which was very visible dominated with rollover centric activities as the Markets remained volatile, moved in either directions and finally ended the day with losses and in the process have formed a lower top and lower bottom on the Daily High Low Charts.

Today, we would see the Markets opening on a flat note and look for directions while continuing to depend upon the intraday trajectory that it forms.

With the Markets expected to open on a flat note, the levels of 4890 and 4930 are expected to act as resistance and the levels of 4810 and 4780 are likely to act as supports.

The lack of triggers on the global front may contribute to global opening but local technicals again point towards possibility of the Markets taking supports at the levels mentioned.

The RSI—Relative Strength Index on the Daily Chart is 27.6491 and it continues to trade in OVERSOLD zone without showing any failure swings. The NIFTY has given a new 14-day low but the RSI has not and this is BULLISH DIVERGENCE.

The Daily MACD continues to trade below its signal line but has flattened out and is improving.

Further to this, the domestic Markets have been grossly underperforming in recent past than its Asian peers. Given this, the technicals, as mentioned above again indicates that the Markets may take support at these levels and attempt yet another pullback. The levels of 4810-4780 continue to remain a major Double Bottom Support and the Markets are likely to continue to trade in a broad range of 4800-4970. A confirmed trend reversal would occur only after the Markets moves out this range.

All and all, limited downside seen given the OVERSOLD lead indicators. However intermittent bouts of volatility cannot be rules out. Continuation to stock specific outlook with positive caution is continued to be advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331

Thursday, August 25, 2011

Daily Market Trend Guide -- Thursday, August 25, 2011 (Puablished in the morning before the Markets opened)

MARKET TREND FOR TODAY

The Markets resisted yesterday to the very categorically stated levels of 4960-4970 levels as it came off from day’s high to end the day with losses and in the process have formed a similar top but slightly higher bottom on the Daily High Low Charts.

Today, we enter into expiry day of the current derivative series and the session is likely to remain dominated with rollover centric activities heavily. Yesterday also, much of the behavior of the markets can be attributed to rollover dominated activities.

Today, expect the Markets to open again on a fairly positive and stronger note and look for directions. But again, as like in the past, the Markets will have to remain in positive intraday trajectory in order to capitalize on today’s positive opening. For today, the levels of 4930 and 4970 are expected to act as resistance and the levels of 4860 and 4810 are supports on the lower side.

The RSI—Relative Strength Index on the Daily Chart is 29.4390 an is neutral as it shows no negative divergence or failure swings. However, it has again gone into OVERSOLD zone, from where it is usually expected to bottom out. The Daily MACD continues to trade below its signal line but looks improving.

As we mentioned a broken Double Bottom to act as resistance, there is a Double Bottom support in the range in 4786-4810 levels which is a major support in case of any downside. Given these levels, the Markets are likely to remain in a broad range of 4800-4970 in immediate term and sustainable pullback may occur only after the Markets moves past the levels of 4970 and sustains above that.

All and all, positive opening expected and the Markets will have to remain in positive trajectory in order to capitalize on this. Also, today being the last day of expiry and the session is likely to remain dominated with rollover centric activities, thus keeping some volatility in the Markets. Stock specific positive caution advised as overall bias remains towards upside.

Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331

Wednesday, August 24, 2011

Daily Market Trend Guide -- Wednesday, August 24, 2011

MARKET TREND FOR TODAY

The Markets saw continuation o pullback as it closed the day with yet another modest gains. However, the session remained bit volatile initially. Both the expiry week as well as some lack of conviction and volumes were visible but still the Markets managed to form a higher top and higher bottom on the Daily High Low Charts.

For today, expect a subdued opening in the Markets. Thus, with subdued or mildly negative opening expected, again, like yesterday, the intraday trajectory and the levels of participation (volumes) will continue to plan critical role in deciding the trend for today, though bias definitely remains on the upside.

With mildly negative opening expected, the levels of 4970 and 5010 shall act as resistance on the upside and the levels of 4915 and 4880 shall act as supports.

The RSI—Relative Strength Index on the Daily Chart is 31.7627 and it is neutral as it shows no negative divergence or failure swings. It has crossed above from a bottoming formation and this is a Bullish sign. The Daily MACD continues to trade below its signal line.

Having said this, the behavior of the Markets vis-à-vis the levels of 4967-4970 would be important. As per pattern analysis, this level was one of the double bottom support drawn from June 2010 levels which the Markets broke. This is likely now to act as resistance. It would be important for the Markets if it opens subdued to move past this levels and sustain above that. Until this happens, it is likely to consolidate around this levels without any significant direction in a volatile manner.

All and all, the Markets are attempting a pullback and have formed a potential bottom. However, it has been lacking in conviction due to lack of volumes. Until the Markets moves past the levels mentioned, very stock specific approach should be adopted. Session shall also remain dominated with rollover activities  as we enter the penultimate day of expiry. Positive caution advised for today.

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

Tuesday, August 23, 2011

Daily Market Trend Guide -- Tuesday, August 23, 2011

MARKET TREND FOR TODAY

The Markets yesterday saw a session with relatively low volumes but set some stage for potential bottom formation as it ended the day with modest gains even after spending the day with volatility and little lack of conviction, which was seen due to lower volumes. The Markets ended the day at 4898.80, posting a gain of 53.15 points or 1.10%.

Today, we can expect the Markets to open on a positive note and look for directions. The Markets are expected to open on a positive note and trade positive at least in the initial trade backed by favorable Technicals. The quantum of gains and to the extent to which Markets would be able to capitalize on such favorable technicals would continue to critically depend upon the intraday trajectory that the Markets forms as well as the volumes.

For today, the levels of 4940 and 4975 shall act as resistance and the levels of 4860 and 4845 are expected to act as supports.

The RSI--Relative Strength Index on the Daily Chart is 27.3142 and is neutral as it shows no negative divergence or failure swing. Also, it continues to remain in OVERSOLD range.

The Daily MACD trades below its signal line but that too now trades in OVERSOLD zone.

On the Candles, An Engulfing Bullish Line has occurred. An Engulfing Bullish pattern is BULLISH during a downtrend which is the Case with NIFTY. It signifies a potential trend reversal and it signifies shifting of momentum from bears to bulls.

All and all, the session is likely to remain on positive note and it is advised to make selective purchases while holding on the current positions. As we are into expiry week, we may see the session also slightly dominated with rollover centric activities. Overall, cautious but positive outlook is advised for today.

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

Monday, August 22, 2011

Daily Market Trend Guide -- Monday, August 22, 2011

MARKET TREND FOR TODAY

The Markets, despite being Oversold, continued to drift lower on Friday, getting further OVERSOLD, ended the day down. Though, while doing so, it has attempted to find a bottom but still have given higher top and higher bottom on the Daily High Low Charts.

Today, we are likely to see some respite from the relentless weakness that we have been seeing and can see the Markets stabilizing in the short term, as the Technicals strongly suggest.

Today, expect the Markets to open on a flat to mildly positive note and look for directions, though it shall continue to depend heavily on the intraday trajectory and the levels of participation in the Markets. Though, as said earlier, technicals certainly point towards possible bottoming out of the Markets in the immediate short term. For today, the levels of 4890 and 4975 are the immediate resistances and the levels of 4810 and 4790 are likely to act as supports.

The RSI—Relative Strength Index on Daily Chart is 22.3259 and is deep into OVERSOLD Zone and does not show any negative Divergence. The Daily MACD continues to trade below its signal line.

On the Weekly Charts, the RSI is 29.7594 and this too has got OVERSOLD on Weekly note and it shows no negative divergence. The Weekly MACD trades below its signal line.

On Daily Charts, the Markets have attempted to find bottom around 4800-4790 levels which is a long term support in form of  Double Bottom drawn from May 2010 levels. Also, on Weekly Charts, the Markets have taken a support at same levels which is also a 200-DMA Weekly Support. Further to this, the Markets have seen short covering from the potential bottom levels of 4796 and FIIs and DIIs have remained net buyers.

In order to confirm short term bottoming, we need to see these shorts being replaced by fresh longs. In case of continuing weakness, it is very strongly advised to avoid shorts and make selective purchases. Cautious optimism is advised.

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