Friday, June 29, 2012

Daily Market Trend Guide -- Friday, June 29, 2012

MARKET TREND FOR TODAY                                                   June 29, 2012
The rollover centric trade and heavy caution weigh in the Markets today as it continued to fiercely consolidate as it ended the day again with very nominal gains after a 25-point volatile movement on the either side. After  opening on a quietly positive note the Markets moved in a capped range as it gave its day’s high of 5159.05. After moving in a capped range, the Markets suddenly gave up the gains as it was expected in our yesterday’s edition in form of a profit taking bout. It pared its gains, dipped into negative and gave its intraday low of 5125.30. It however saw sharp recovery from those lows. It however eased a bit and finally Closed at 5149.15, posting a nominal gain of 7.25 points or 0.14%. It formed a parallel bar on the Daily High Low Charts.

Today, as we enter into the new derivative series, today’s session would be important on many counts. The Markets are expected to open on a positive note, and this positive opening would again cause the Markets to open near its 100-DMA which has been acting as the upper range of the broad trading range the Markets has remained in last couple of sessions. The intraday trajectory, in this case, would remain critically important and the  behavior of the Markets in the range of 5190-5200 would be critically important.

The levels of 5190 and 5225 shall act as immediate resistance and the levels of 5095 and 5075 shall act as supports on the charts.

The lead indicators continue to remain comfortably in place. The RSI—Relative Strength Index on the Daily Chart is 58.2422 and it shows no negative or positive divergence or failure swings and is therefore neutral. The Daily MACD too remains bullish as it trades above the signal line.

The NIFTY and Marketwide rollovers have remained above average this time and the Open Interest in NIFTY has been at a 3-Month high and this is a clear indicator of a buoyant undercurrent, unless some external news flow plays a spoilsport. 

The Markets shall try and trade around the upper range of the broad trading range. However, the levels of 5194 will continue to act as a immediate top and resistance for the Markets. It would be the third attempt to move past that resistance. A fresh sustainable up move shall occur only after the Markets moves past the zone of 5195-5220 levels. So, the behavior of the Markets around these levels would be critically important.

All and all, even with the positive opening, the Markets would be in the broad range – though at the upper levels and the intraday trajectory at those levels and the volumes would be important. Like yesterday, the profit taking bouts ingrained with some amount of volatility is no ruled out. While avoiding shorts strictly the profit should be protected at higher levels and only selective longs should be taken before a clear breakout is achieved. Overall, positive caution is advised for today.

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


Thursday, June 28, 2012

Daily Market Trend Guide -- Thursday, June 28, 2012

MARKET TREND FOR TODAY                                                       June 28, 2012
A  day of range bound activity and positive consolidation. This is what can explain the yesterday’s session in the Markets as the Markets opened positive, spent the day in the positive territory and ended the day with modest gains after moving in a relatively narrow range. The Markets opened on a positive note and while remaining in upward rising trajectory, gave its day’s high of 5160.10 in the afternoon trade. It came off a bit in the late afternoon trade, but recovered a bit again and finally ended the day at 5141.90, posting a modestly decent gain of 21.10 or 0.41%. It formed a higher top and higher bottom on the Daily High Low charts.

Today, we enter into the expiry day of the current June Derivative Series and thus the session is likely to remain heavily dominated with rollover centric activities. Further to this, the Markets continue to heavily consolidate and thus expect the Markets to open on a moderately positive note and continue with consolidation with upward bias.

The levels of 5195 and 5220 shall act as immediate resistance on the Charts and the levels of 5105 and 5075 shall act as immediate supports.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 57.6205 and is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to remain bullish as it trades above its signal line.

The NIFTY and Stock Futures have continued to add Open Interest and this shows net longs in the key stocks as well as NIFTY and clearly points towards the clear possibilities of the Markets touching the upper levels of the broad trading range, i.e. 5200. The NIFTY PCR stands at 1.54, leaving a gap for the upside.

Having said this, today we enter into expiry day of the current series. The session will see the rollover activities dominating the trend. The intraday trajectory that the Markets form would be important.

All and all, the Markets shall continue to consolidate, but  with upward bias as the under current remains bullish. In the phase of consolidation, there might be range bound movements with tinge of volatility ingrained in it. Occasional bouts of profit taking cannot be ruled out either. Any weakness should be used to make selective purchases. Shorts should be avoided as there are no negative breaches anywhere on the Charts. Overall, positive optimism is advised for today.

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


Wednesday, June 27, 2012

Daily Market Trend Guide -- Wednesday, June 27, 2012

MARKET TREND FOR TODAY                                              June 27, 2012
The Markets saw a directionless, volatile and a narrow range bound session yesterday as it continued to consolidate as it ended the day with nominal gains after moving all over the places during the day. The Markets opened on a mildly negative note traded in the positive side with capped gains after remaining briefly into the red. The Markets gave its intraday high of 5134.35 in the late afternoon trade. It soon gave off its gains, dipped into the red and gave its intraday low of 5095.50. It however, recovered again in the last half an hour of trade and finally ended the day at 5120.80, posting a nominal gain of 6.15 points or 0.12%. It has formed a sharply lower top and mildly lower bottom on the Daily High Low Charts. The volumes remained moderately below average.

Today’s analysis remains more or less similar to that of yesterday. We enter the penultimate day of expiry of the current June series and the session is likely to remain dominated with rollover centric activities. Positive consolidation would continue as the Markets are expected to open on a mildly positive note and continue with the yesterday’s up move that was seen towards the end of the session. Since the Markets continue to remain a  broad range and under consolidation, the intraday trajectory would continue to remain important to dominate the trend for the day.

The levels of 5155 and 5195 shall act as resistance and the levels of 5074 and 5050 shall act as immediate support on the Charts.

All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 55.8437 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trades above its signal line and it is not in overbought or oversold range.

The Markets shall continue to remain in a broad range defined with the levels of 5200 acting as immediate top but this consolidation is expected to remain a positive consolidation with an upward bias given the fact that the NIFTY and stock futures have continued to add Open Interest and the NIFTY PCR stands at 1.49, still leaving a significant gap on the upside. This, under normal circumstances, indicates the undercurrent remaining buoyant and intact.

Given the penultimate day of expiry, the session is likely to remain dominated with rollover centric activities for today and tomorrow also, and this will, in turn, likely the keep the  Markets either range bound or volatile and profit taking bout may happen. While strictly avoiding shorts, selective purchases may be made but profits need to be vigilantly protected. Overall, positive outlook is advised for today.

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


Tuesday, June 26, 2012

Daily Market Trend Guide -- Tuesday, June 26, 2012

MARKET TREND FOR TODAY                                                       June 26, 2012
The Markets had a turbulent start to the week as the levels of 100-DMA acted as a resistance and the RBI’s announcement did not meet the street expectations as the Markets ended the day with losses after a buoyant session during the day.  Markets opened higher contrary to expectations and further strengthened to give the day’s high of 5194.60. This was against the expected resistance levels of 5200 mentioned by us. It came off a little post the day’s high and traded in a range, but came off swiftly in the last hour of the trade. It erased all of its gains, dipped into the red and went on to give the day’s low of 5105.65. It finally ended the day at 5114.65, posting a net loss of 31.40 points or 0.61%. It has, still formed a higher top and higher bottom on the Daily High Low Charts.

Severe consolidation continued yesterday and that is likely to continue today also, but we can expect to see some respite from the quantum of weakness that we saw yesterday in the last hour of the trade. The Markets are expected to  open on a flat to moderately positive note and look for directions. There is no negative breakdown on Charts and thus, the intraday trajectory would be continue to remain critically important as the Markets continues to remain in a broad range.

The levels of 5162 and 5200 would continue to act as resistance on the Charts and the levels of 5090 and 5074 shall act as immediate support.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 55.3369 and it continues to remain neutral as it shows no negative or positive divergence and / or failure swings. The Daily MACD still continues to remain bullish as it trades above its signal line. The NIFTY PCR stands at 1.45 as against 1.52 yesterday.

Having said this, it is important to note that the NIFTY and Stock Futures have added in net Open Interest and thus this shows creation of fresh shorts on key select counters in the last hour of the trade.

We can fairly conclude that there is no negative breach on the Charts as yet and the Markets shall continue to remain in the  broad trading range however, the levels of 5200 has  become an immediate top and fresh up move shall occur only above 5200. However, again, given no negative breach on the Charts, the Markets shall remain in a range with an upward bias as the under current remains intact.

All and all, give this reading of no negative breach on one hand and the levels of 5200 acting as immediate top, this range bound movement shall continue. Any profit taking bouts should be used to make select purchases and shorts should be strictly avoided. However, at the same time, profits now needs to be vigilantly protected at higher levels. Overall, positive caution is advised.

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


Monday, June 25, 2012

Daily Market Trend Guide -- Monday, June 25, 2012

MARKET TREND FOR TODAY                                                    June 25, 2012
The Markets had an turbulent session on Friday as it witnessed good amount of weakness in the first half of the session but ultimately saw minor consolidation at Close as it ended the day with moderate losses after recovering from its day’s lows. The Markets opened negative and after trading with capped losses, saw itself getting weaker as it went on to give the day’s low of 5094 in the mid afternoon session. Thereafter, the Markets saw a decent recovery from its day’s low as it recovered most of its losses and after a brief range bound trade on the upside, ended the day at 5146.05, posting a moderate loss of 18.95 points or 0.37%. It has formed a almost parallel bar with a slightly lower top on the Daily High Low Charts. On the Weekly note, the NIFTY has ended flat with negligible gains of just 7 points or 0.15%.

The week that went by remained a week of consolidation and so will be the coming week, at least as it appears from the technical charts. The Markets are expected to open today on a moderately negative note and continue to consolidate and trade in a range. A range bound Markets may be seen with the level of 100-DMA acting as a immediate resistance and a top.

For today, the levels of 5200 and 5225 shall act as immediate resistance on the Charts and the levels of 51105 and 5080 are immediate supports. Thus, the Markets are still within the broad range 5060-5200 and trades near the upper limits of the range.

The RSI on the Daily Charts is 58.5213 and is neutral as it shows no negative divergence or failure swings. The Daily MACD is bullish as it trades above its signal line. On the Candles, three white candles occurred in last three days. Although not big enough to create three white soldiers, the steady upward pattern is bullish.  On the Weekly Charts, the RSI is 51.0175 and it is also neutral as shows no negative / positive divergence or any failure swings. The MACD trades below its signal line. 

Trying to make sense out of these neutral indicators and consolidating markets, it can be fairly concluded that the Markets shall continue to consolidate and will see a range bound trade, but with the range being larger as mentioned above. However, it would also be governed by the external news flow at both domestic and international levels. 

Also important to note that the way markets have no immediate triggers to move up, it does not have any triggers to come down either. So a slightest tinge of a positive news flow, it is likely to test the upper range of the broad trading range defined earlier. 

All and all, some consolidation days ahead, along with rollover dominated activity since we enter into the expiry week. Any profit taking bouts should be utilized to make selective purchases and shorts should be strictly avoided as the undercurrent remains intact. Overall, positive outlook is advised for today.

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