Friday, January 20, 2012

Daily Market Trend Guide -- Friday, January 20, 2012

MARKET TREND FOR TODAY                                                         January 20, 2012
The Markets yesterday opened on a positive note and maintained its gains throughout the day as it extended its up move by ending with decent gains. The Markets opened positive and strong and maintained its gain by spending the session bit volatile in 30—odd point range. It kept moving in this capped range, gave its intraday high of 5023.80 and ended the day at 5018.40, posting a decent rise of 62.60 points or 1.26%. In the process, the Markets have formed a sharply higher top and higher bottom on the Daily High Low Charts.

For today, the technicals point towards continuation of this up move, at least in the initial session. The Markets are expected to open on a positive note and continue with its up move. The Markets shall open positive and the intraday trajectory, like yesterday, along with the volumes would be critically important to determine that the Markets continues with its up move or consolidate or see some profit taking after opening higher.
For today, the levels of 5052 and 5075 are expected to act as resistance and the levels of 4980 and 4930 levels. With the Markets rising, the gap between probable resistances and supports have widened a bit due to continuation of up move.

The technical reading and the F&O statistics present a mixed picture. The RSI—Relative Strength Index on the Daily Chart is 66.7756 and it has reached its highest value in last 14-days which is bullish. It does not show any negative / positive divergence. The Daily MACD is bullish as it continues to trade above its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.  There have been 5 rising windows in the last 50 candles--this makes the current rising window even more bullish.

Having said this, the NIFTY Futures in total have reported shedding of 11 lakh shares in Open Interest. This translates into the reading that the Markets may open higher, spend some time in the gains but are remotely likely that it sees either consolidation from higher levels, or sees some profit taking. This may keep the markets in a range and also bit volatile. It is advised that aggressive longs should be restrained and any existing profits should be vigilantly protected. Stock specific activities may continued to be seen. Overall, neutrally cautious outlook is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331

Thursday, January 19, 2012

Daily Market Trend Guide -- Thursday, January 19, 2012

MARKET TREND FOR TODAY                                                          January 19, 2012

After a smart rally on Tuesday, the Markets took a breather yesterday as it spent the session on a consolidation note, taking supports precisely at the mentioned levels and ending the day on mildly lower note. The Markets opened positive, and gave its intraday high of 4980.65 in the morning trade. After trading briefly with capped gains, the Markets saw some correction coming in as it slipped into the red. It went on to give the low of 4931.05, taking support at its 100-DMA and recovered from those levels to end the day at 4955.80, posting a modest loss of 11.50 points or 0.23% and formed a slightly higher top and bottom on the Daily High Low Charts.

For today, we can expect the Markets to open on a positive and stronger note and continue with its up move that took some breather yesterday. The Markets are expected to open positive and continue with its up move at least in the initial trade. Today, the intraday trajectory that it forms, especially in the morning trade would be critically important to decide the trend for the rest of the day.

The levels of 4990 and 5055 are expected to act as resistance the levels of 4930 and 4890 are expected to continue to act as immediate supports.

All lead indicators  continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 63.1725 and is neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

The above technical reading is supported by F&O statistics which shows addition of open interest  in NIFTY Futures and the Open Interest across Stock futures remains unchanged. Given this, the Markets are technically better poised to continue with its up move. 

All and all, buoyancy in today’s session can be expected. However, in event of Markets moving past the 5000-5030  levels , it would be prudent to avoid aggressive buying and protect existing profits at higher levels. In event of higher opening, it is advised to remain highly selective in making purchases and very vigilantly protect profits as just mentioned above, while strictly avoiding any major shorts. Overall, positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331

milanvaishnav@yahoo.com

Wednesday, January 18, 2012

Daily Market Trend Guide -- Wednesday, January 12, 2012

MARKET TREND FOR TODAY                                                     January 18, 2012

The Markets had a very buoyant session yesterday, perhaps more than expected as it opened on a stronger-than-expected note, remained so for the entire session and ended the day with robust gains. The Markets opened on a positive note and kept making intraday highs for the entire session remaining in positive rising trajectory. The Markets moved past its 50 and 100-DMA during the day as it made its day’s high of 4975.55. It end the day near the high point of the day at 4967.30, posting a robust gain of 93.40 points or 1.92%. The Markets formed a higher top and higher bottom on the Daily High Low charts and saw volumes Rs. 1.40 lakh crores, above its average.

For today, technically speaking buoyancy in the Markets is expected to continue, but at the same time, consolidation cannot be ruled out. Expect the Markets to open on a flat note and look for directions. The intraday trajectory would be very crucial and the resistances that the Markets moved past yesterday would act as supports.

For today, the levels of 4930 and 4880 are likely to act as supports and the levels of 4995 and 5040 are expected to act as resistance on the upside. 

All lead indicators continue to point towards buoyancy. The RSI—Relative Strength on the Daily Chart is 63.9876 and it has reached its highest value in last 14-days which is bullish. It does not show any negative divergence. The Daily MACD continues to remain bullish as it trades above its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.  There have been 4 rising windows in the last 50 candles--this makes the current rising window even more bullish.

The NIFTY Futures have shown net addition in Open Interest and so have key stocks. So, apparently, we can certain believe the trend to have strong undercurrent, but at the same time, it would be prudent if we expected some consolidation to, looking at the “Overbought” nature of some NIFTY components. All and all, selective stock purchases may be made and profits should still be protected at higher levels. Even if the Markets sees some consolidation, or some profit taking bouts or movement in the capped range, it would be healthy for the Markets in the long run as it would make this up move even more healthy and sustainable. Positive approach is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


Tuesday, January 17, 2012

Daily Market Trend Guide -- Tuesday, January 17, 2012

MARKET TREND FOR TODAY                                                           January 17, 2012

The Markets continued to consolidate yesterday as it opened on a lower note but went on to recover and end the day with modest gains. The Markets opened on a lower note on expected lines and gave its intraday low of 4827.05 in the morning trade. Thereafter, it transformed itself into rising trajectory and not only recovered from its morning lows but went into the positive territory to give intraday high of 4880.80.  After trading in capped range there, it ended the day at 4873.90 posting a modest gain of 7.90 points or 0.16%. In the process, the Markets formed a slightly lower top and lower bottom on the Daily High Low Charts.

For today, the analysis remains the same as the one carried out yesterday. The Markets continue to remain under consolidation with positive bias.

For today, expect the Markets to open on a flat note. Thus, the Markets expected to open flat, the consolidation is likely to continue which may keep the Markets in a capped range. Due to this, the intraday trajectory and the volumes will continue to play critical role in determining the trend for the day. For today, the levels of 4900 and 4940 shall continue to act as resistance the levels of 4843 and 4800 shall act as immediate supports.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 57.5717 and it shows no negative divergence. The RSI has reached its highest value in last 14-days which is Bullish. The Daily MACD remains bullish as it continues to trade above its signal line.
In addition to this, the NIFTY Futures have added over 3 lakh shares in Open Interest and NIFTY PCR remains at 1.26. 

From the above reading, it can be fairly concluded that the even though the Markets continues to consolidate at close levels, the undercurrent remains bullish. The Markets may remain volatile or trade in a range but the bias remains on the upside and are likely to test its 100-DMA levels on the upside. The levels of 4800 would have to be maintained in order to avoid any kind of serious weakness in the Markets which seems very much likely as the level  continues to act as immediate support.

All and all, since the undercurrent remains buoyant, it is advised to refrain from short positions even if the Markets sees range bound trading, or even if it sees some profit taking bouts. At the same time, selective purchases may be continued to be made while vigilantly protecting profits at higher levels. Overall, cautious optimism is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331