Friday, May 18, 2012

Daily Market Trend Guide -- Friday, May 18, 2012

Due to a technical glitch, today's edition of Daily Market Trend Guide has not been published. Inconvenience caused is sincerely regretted.

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

Thursday, May 17, 2012

Daily Market Trend Guide -- Thursday, May 17, 2012

MARKET TREND FOR TODAY                                                 May 17, 2012
Markets opened lower with weak global cues and went on to end the day with losses as it got oversold again on Close Charts. The Markets saw a gap down opening following weak global cues and post opening in the red, made no attempts to recover. It remained in a falling channel and went on to give the day’s low of 4837.05. The Markets made an feeble attempt to recover from its lows in the latter half of the session,  but gave up again to finally end the day at 4858.25, posting a loss of 84.55 points or 1.71%. The volumes remained around average and the Markets closed heavily Oversold, forming a lower top and lower bottom on the Daily High Low Charts.

The Markets stands OVERSOLD again, and thus, we can see some respite coming in from the weakness that we saw yesterday. The Markets are expected to open on a modestly positive note and look for directions and the intraday trajectory would continue to remain important and resistance would be seen on the downside.

The levels of 4925 and 4965 are immediate resistance on the Charts and the levels of 4840 and 4810 are immediate supports.

The lead indicators continue to remain OVERSOLD. The RSI—Relative Strength Index on the Daily Chart is 27.8096 and is in OVERSOLD range and also has reached its lowest value in last 14-days. IT does not show any negative divergence. The Daily MACD continues to remain below its signal line.

The Markets have seen external pressure being exerted on it and during such time, it tends to defy the technicals. The NIFTY has lost over 175 points while being OVERSOLD vindicates this point. However, in such case, it is best advised to sit through this, without attempting to average and maintain adequate liquidity.

Today also, we can expect some respite from the weakness that we have been seeing in last couple of sessions. However, at the same point, it is still advised to remain light on positions and avoid any heavy positions on either side, and shorts should  be specifically avoided. 

All and all, even with some respite, aggressive positions should be avoided. This is because, we may see a pullback, but what we need is a reversal. There is a difference between pullback and reversal. Thus, highly stock specific and selective approach should be avoided and only selective purchases may be made avoiding aggressive positions and protecting profits. Shorts should be strictly avoided. Overall, a cautious optimism is advised for today.

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


Wednesday, May 16, 2012

Daily Market Trend Guide -- Wednesday, May 16, 2012

MARKET TREND FOR TODAY                                                            May 16, 2012
The Markets snapped its 5-day losing streak as it opened moderately low, improved as the session went ahead and finally ended the day with modest gains, quite on expected lines. The Markets opened on a moderately negative note  and traded in a capped range in the morning trade. It however, came into the positive territory and while remaining in upward rising trajectory, went on to give the day’s high of 4955.20 in the afternoon session. The Markets came off a bit from those levels but recovered again to finally end the day near the high point of the day at 4942.80, posting a net gain of 35 points or 0.71%. The volumes remained on the lower side and the Markets have formed a almost parallel bar with slightly lower top and bottom on the Daily High Low Charts.

Technically speaking, since the Markets have ended the day near the high point of the day, they should, under normal circumstances, continue with their up move. However, this shall not happen following global cues and we are again likely to see a weaker opening. However, we are not expected to see lows below the opening levels as the Markets would again get OVERSOLD and the technicals would resist the downside.
For today, the levels of 4970 and 5025 are immediate resistance levels and the levels of 4905 and 4860 are immediate supports on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 32.3078 and it has just moved above its Oversold area, which is Bullish. It does not show any negative divergence or failure swings and it is therefore neutral. The Daily MACD continues to trade below its signal line. 

On the Candles, An engulfing bullish line occurred (where a white candle's real body completely contains the previous black candle's real body).  The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with NIFTY).  It then signifies that the momentum may be shifting from the bears to the bulls.

Having said this, it is important to note that had there been no negative global cues, the Markets were expected to continue with their imminent pullback. However, the weak global cues would cause a lower opening but, again, the technicals are likely to resist to any further weakness post opening. There are bright chances that the Markets open lower and after hovering around the low levels of the day, improves as we go ahead in the session because any lower opening would make the Markets OVERSOLD again.

All and all, the analysis remains the same as the Markets would get OVERSOLD again after the weaker again. The volatility would refuse to go away so retail investors should remain light on their positions and protect profits vigilantly. Shorts should strictly be avoided. Overall, cautious outlook is advised for today.

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



Tuesday, May 15, 2012

Daily Market Trend Guide -- Tuesday, May 15, 2012

MARKET TREND FOR TODAY                                                         May 15, 2012
The three factors, Greek Crisis in the Eurozone, the Rupee continuing to slide and the inflation numbers continued to play spoil sport on the already OVERSOLD Markets as the Markets gave up its early session gains to end the day with moderate losses. The Markets opened positive and gave its intraday high of4957.50 in the early morning trade. After trading in a capped range, the Markets suddenly gave up its morning gains as it reacted to inflation numbers and the euro zone news flows as it went on to give the day’s low of 4874.50 in the late afternoon trade. It however, recovered a bit to finally end the day at 4907.50, posting a moderate loss of 21.10 points or 0.43%. It has continued to form a lower top and lower bottom on the Daily High Low Charts.

Today’s analysis would be more or less similar as the Markets can open moderately lower and improve as the session progresses and we may see the OVERSOLD technicals of the Markets resisting any major downside.

For today, the levels of 4975 and 5025 are immediate resistance and the levels of 4865 and 4810 are immediate supports on the Charts.

The lead indicators of the Markets continue to remain OVERSOLD. The RSI—Relative Strength Index on the Daily Chart is 27.8201 and though it has reached its lowest value in last 14-days continues to remain in OVERSOLD territory. It does not show any negative divergence. The Daily MACD continues to remain below its signal line.

It is important to note that the NIFTY futures have added 5.50 lakh shares in Open Interest and now has one of the highest Open Interest and positions on the short side. Secondly more important to note, statistically is that the FIIs have remained net  buyers in the Cash Segment yesterday to the tune of over Rs. 300 crores and have been net sellers to the similar amount in NIFTY futures, indication further addition of Open Interest and thereby the short positions.

It is important to note that the technicals are playing the part by resisting any major downside and the Markets now remain heavily OVERSOLD. There are chances of a pullback rally that can be seen even if the Markets continue to remain in the overall downtrend. It is important to note that a pullback rally now is overdue.

All and all, we reiterate our advice to retail investors to stay away from any heavy positions on either side and specifically avoid fresh shorts. Profits may be protected and selective purchases may be made. Overall, positive caution is advised for the day.

 Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331 



Monday, May 14, 2012

Daily Market Trend Guide -- Monday, May 14, 2012

MARKET TREND FOR TODAY                                                     May 14, 2012
The Markets continued to remain terribly volatile and got finally OVERSOLD on Friday as it moved all over the places before ending the day with losses. The Markets opened negative and after remaining in a capped range on the negative side, it saw sudden deepening of the cut as it reacted to IIP Numbers and went on to give the day’s low of 4906.15. However, after remained in a capped range again, the Markets saw a massive short covering from those levels. It not only recovered all of its losses, but also went into the green and gave its intraday high of 4976.25. It however came off again and finally ended the day at 4928.90, posting a loss of 36.80 points or 0.74%. It has continued to form lower top and lower bottom on the Daily High Low Charts and have ended the week with net loss of 157.95 points or 3.12%.

The Markets are finally OVERSOLD. Today, expect the Markets to open flat and are expected to remain directionless in the initial session and have all technical chances to improve as the session goes ahead. The intraday trajectory would continue to remain important.

For today, the levels of 5010 and 5045 are immediate resistance levels and the levels of 4905 and 4860 are immediate supports.

The lead indicators are OVERSOLD. The RSI—Relative Strength Index on the Daily Chart is 28.8923 and it now trades in OVERSOLD territory. Though it has reached its lowest value in last 14-days, it does not show any negative divergence. The Daily MACD  continues to trade below its signal line. On the Weekly Charts, the RSI is 41.2005 and it has reached its lowest value in last 14-days. The 200-Week Moving Average stands at 4810.

NIFTY and Stock Futures both have gone ahead in adding Open Interest and the NIFTY PCR stands at 0.81, which too is nearing Oversold levels.

Having said this, from the above reading, we can fairly conclude that the Markets on Daily Charts are absolutely OVERSOLD and some respite from the current weakness can be seen, at least in the initial week. Even if we presume that the Markets may touch the levels of 4810 mentioned above, it should not happen before a pullback is seen on the Daily Charts in the initial week.

All and all, the Markets are loaded with shorts positions, are Oversold and thus, there are fair chances set for a short  covering and bias towards up move. There are chances that we open flat and improve as the session goes ahead. However, volatility is definitely to remain. Any sharp up move should be used in protecting profits on existing positions and the retail investors are  continued to be advised to remain light on the positions and refrain from shorts by any means. Overall, a cautiously positive outlook is advised for today.

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