Friday, May 25, 2012

Daily Market Trend Guide -- Friday, May 25, 2012

Due to technical glitch, a detailed version of Daily Market Trend Guide is not published today. Inconvenience caused is sincerely regretted.
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Markets likely to open moderately positive to flat and look for directions. Though it may consolidate in the initial session, the undercurrent remains buoyant and trend remains bullish. This is supported by the F&O Data and lead indicators. The RSI on the Daily Chart has just reached its highest  value in last 14-days which is BULLISH. Also, RSI has set a new 14-day high whereas NIFTY has not yet an this is BULLISH DIVERGENCE. On the Candles, A Morning Star occured and this can be considered as a major bottom for the Markets.

Overall, while avoiding shorts, positive bias is advised for today. Intraday trajectory would be important. Volatility too is likely to remain.

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

Thursday, May 24, 2012

Daily Market Trend Guide -- Thursday, May 24, 2012

MARKET TREND FOR TODAY                                               May 24, 2012
The bleeding Rupee took the Markets take a further moderate dip as the session remained absolutely volatile and directionless on expected lines and the Markets, after spending the session going nowhere, ended the day with moderate losses. The Markets opened negative and after trading in a capped range, saw a bout of weakness as it gave its intraday low of 4803.95 in the late morning session. The Markets saw a sharp recovery again, traded in a range and gave up again. However, it saw some recovery again as it finally ended the day at 4835.65, posting a loss of 24.85 points or 0.51%. It formed a sharply lower top and lower bottom on the Daily High Low Charts.

The Markets are Oversold a gain and today, we can expect a modestly positive opening in the Markets. The rise and quantum of rise in the Petrol price would  be sentimentally positive and key would be to see it the Markets further capitalizes on the positive opening that it is set to get today. The intraday trajectory would be important.

The levels of 4880 and 4935 would act as immediate resistance and the levels of 4810 and 4780 would act as immediate supports.

The lead indicators point towards some potential relief from the current weakness.  The RSI—Relative Strength Index on the Daily Chart is 29.5454 and it does not show any failure swing. The NIFTY has set 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. 

Both NIFTY and Stock futures have added nominal Open Interest with the FIIs remaining moderately net buyers in both F&O and Cash segment.

Overall, there is no trend reversal or even a pullback as yet, which we feel is long overdue. The Markets are oversold and we may see some pullback from this levels today, but intraday trajectory would be equally important to see if the Markets sustains these expected modest opening gains.

All and all, it is advised to continue to tread the Markets on a cautious note. Aggressive positions should still be avoided and shorts should be completely avoided. Adequate liquidity should be maintained to protect existing positions and profits should be vigilantly booked at higher levels. Volatility is going to stay. Overall, positive caution is advised for today.

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


Wednesday, May 23, 2012

Daily Market Trend Guide -- Wednesday, May 23, 2012

Due to technical glitch, we have not been able to publish today's edition of Daily Market Trend Guide. Inconvenience caused is sincerely regretted.
 
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
 

Tuesday, May 22, 2012

Daily Market Trend Guide -- Tuesday, May 22, 2012

MARKET TREND FOR TODAY                                                  May 22, 2012
After having a positive opening and after maintaining gains in  a reluctant manner throughout the session, the Markets gave up the gains in the last hour of the trade to end the session with modest gains. The Markets opened positive and remained positive throughout the session and also went on to give the day’s high of 4937.50. However, post volatile session, the Markets came off from those highs after spending some time in a capped range and finally ended the day at 4906.05, posting a modest gain of 14.60 points or 0.30%. It formed a higher top and sharply higher bottom on the Daily High Low Charts.

For today, expect the Markets to open on a buoyant note and trade positive at least in the initial trade. To form a potential bottom and continue with the pullback, it would be critically important for the Markets to sustain the morning gains and capitalize on it and for this intraday trajectory would be equally important.
The levels of 4940 and 4985 shall act as resistance today and the levels of 4890 and 4855 shall act as immediate supports on the Charts.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 33.8796 and is neutral as it shows no negative divergence or failure swings. The Daily MACD c continues to trade below its signal line.

Both NIFTY and Stock futures have continued to add in open interest. The F&O figures very clearly suggests that fresh longs have been added in the individual stock futures indicated by rise in Open Interest. Further fresh shorts in NIFTY too are seen as it added Open Interest in the last hour of the trade while coming off from its high.

The overall reading for the Markets would remain more or less similar to that of yesterday, i.e. to remain selective with the individual stocks while avoiding shorts.
All and all, volatility will continue in the Markets but the Pattern Analysis and F&O data clearly suggests the trend to remain overall intact despite volatility and has a upward bias. Selective stock purchases may be made while strictly avoiding shorts and continuing to vigilantly protect profits at higher levels. Overall, positive outlook is advised for today.

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


Monday, May 21, 2012

Daily Market Trend Guide -- Monday, May 21, 2012

MARKET TREND FOR TODAY                                                            May 21, 2012
The Oversold Markets opened lower on Friday, went on to dip further before it saw a remarkable recovery from its day’s low and finally ended the day with modest gains. The Markets opened lower on Friday and went on further to give the day’s low of 4788.95. However from the late morning trade, the Markets bottomed out and it transformed themselves into rising trajectory and remained in the upward rising channel till the end of the session. The Markets went on to recover all of its losses, came back into the green and went on to give the day’s high of 4908.50, recovering over 120-odd points from the day’s low. The Markets finally ended the day at 4891.85, posting a net gain of 21.25 points or 0.44%. The Markets have formed a lower top and bottom on the Daily High Low Charts and have ended the week with net loss of 37.45 points or 0.74%.

For today, we can expect to see a modest opening in the Markets with the Markets expected to open on a flat to mildly positive note and look for directions. There are chances that the Markets consolidates a bit after a 120-point rally from Friday’s lows. The key would be to see if the Markets consolidates and do not lose ground in order to capitalize Friday’s recovery and for this, the intraday trajectory would be critically important.

The levels of 4935 and 4990 are immediate resistance levels on the Charts and the levels of 4850 and 4810 are expected to act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 32.0097 and it is neutral as it shows no negative divergence or failure swings. 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.

On the Weekly Charts, RSI 40.1449 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any failure swings.  The Weekly MACD continues to trade below its signal line. 

It is important to note that the Markets have taken intraday support at the 200-Week Moving Average as evident from the WEEKLY Chart given below.

From the above reading, the Markets shall continue to find support at the Friday’s lows. The overall technical reading and the F&O statistics which shows addition of Open Interest in both Stock and NIFTY futures suggest that the Markets are not likely to breach these lows. Also, it suggests a potential bottom formation at the Friday’s low levels. However this needs confirmation.

All and all, the consolidation and range bound movement is likely in the Markets and volatility is likely to stay. Stock specific activity is likely to continue and any downside can be utilized to make selective purchases. At the same time, profits should be protected and shorts should strictly be avoided. Overall, very light positions with cautious optimism is advised for the day and this week.

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