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Thursday, August 16, 2012

Daily Market Trend Guide -- Thursday, August 16, 2012

MARKET TREND FOR TODAY August 16, 2012

The Markets had a good second half of the session as it reacted to lower than expected inflation and ended the second day with modest gains. Though what the Markets overlooked on Tuesday was the decline in exports and the widening of the deficit. The Markets opened on a quiet note as expected and briefly dipped into the red giving its intraday low of 5328.80. However, after the announcements of the inflation numbers, the Markets saw some short covering lead by banks and interest rate sensitives as it not only recouped its minor losses but went on to give the day’s high of 5387.05. It hovered around those levels until the end of the session and finally ended the day at 5380.35, posting yet another modest gain of 32.45 points or 0.61%. The Markets have formed a higher top and higher bottom on the Daily High Low Charts.

Today, we may see a flat to mildly negative opening as the current mild positive global cues are likely to get offset as the global markets were weak yesterday and we had a holiday here. We are likely to see a flat to mildly negative opening and the consolidation after the Tuesday’s rise is likely to continue as the Markets are yet to move past their major resistance levels.

The levels of 5400 are likely to continue to act as major resistance as indicated by the red trend line on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 66.1755 and it has reached its highest value in last 14-days. Though it does not show any negative or positive divergence. The Daily MACD continue to trade above its signal line.

The NIFTY and Stock futures have continued to add in Open Interest overall and the NIFTY PCR has inched up to 1.22.

Having said this, there are two important factors to be kept in mind. First, the Markets are yet to move out of the resistance zone of 5377-5405. So, they are likely to continue to resist around these levels, even if we see positive trade initially. Secondly, on the fundamental side, though the inflation numbers have been lower than expected, the trade deficit has been at its all time low with the exports falling by 14.8%. This is likely to contribute to the current technical formation on the Charts.

All and all, it is advised not to get carried away by the Tuesday’s up move and no aggressive longs should be built until the Markets moves past its key resistance levels. Consolidation and bouts of profit booking would be continued to be seen, making the Markets either range bound or bit volatile. High degree of selective approach is advised with cautious outlook today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, August 14, 2012

Daily Market Trend Guide -- Tuesday, August 14, 2012

Due to a technical glitch, we have not able to publish your copy of Daily Market Trend Guide in regular PDF Format. We are reproducing the text version of "Market Trend For Today". Inconvenience caused is seriously regretted.

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MARKET TREND FOR TODAY
Today's session is again likely to see a flat opening like yesterday and the behavioral trend of the Markets is likely to remain similar that of yesterday. We are again to set to see a listless session, baring the fact the Markets may react in little volatile manner to the July Inflation numbers set to come in today. Otherwise, the consolidation is likely to continue.

The levels of 5377 continues to remain a immediate top for the Markets followed by a major resistance of 5398/5400 levels. The supports come in at 5310 and 5265 levels.

The RSI--Relative Strength Index on the Daily Chart is 63.5351 and it has reached its highest value in last 14-days which is bullish. But it does not show any positive / negative divergence either. The Daily MACD continues to trade above its signal line.

If we go by the pattern analysis, the Markets are not likely to see a run-away rise, as mentioned in our yesterday's edition of the Daily Market Trend Guide. Given the fact that it has a immediate top at 5377 and a major pattern resistance at 5398/5400 sustainable up move shall occur only above those levels.

All and all, until these levels are breached, Markets are likely to see a listless sessions and may remain range bound with intermittent bouts of either short covering or profit taking with overall downward bias. It is continued to be advised to remain highly stock specific, and avoid highly aggressive positions on either side until the Markets move out of these patterns. Overall, cautious day ahead for the Markets.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, August 13, 2012

Daily Market Trend Guide -- Monday, August 13, 2012

MARKET TREND FOR TODAY August 13, 2012

The Markets had a very volatile session on Friday as it opened lower, went further into the red, recovered from its day’s lows and ended the day flat with very negligible losses. The Markets opened on a moderately negative note. It traded in a capped range in the beginning and then slipped further into the red as it gave its day’s low of 5294.10. However, in the second half of the session, it saw some recovery as the Markets recovered from its day’s lows and also went marginally into the green giving the day’s high of 5330.10. It hovered in a capped range in the last hour of the trade and finally ended the day at 5320.40, posting a very negligible loss of 2.55 points or 0.05%. The Markets have formed a lower top and lower bottom on the Daily High Low Charts.

Today, we can expect a fairly quiet start in the Markets. The Markets are expected to see a very quiet and flat opening and shall look for direction as they would continue to consolidate. Because of ongoing consolidation, the intraday trajectory would be critically important to decide the trend for today.

The levels of 5335 and 5355 shall act as immediate resistance on the Charts and the levels of 5290 and 5255 would be immediate supports on the Charts.

The RSI—Relative Strength Index on the Daily Charts is 61.1484 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line. The Weekly RSI is 56.3011 and it does not show any failure swing but the NIFTY has set a new 14-week low but the RSI has not and this is BEARISH DIVERGENCE. The Weekly MACD however continues to trade above its signal line.

Reading this along with the F&O statistics clearly indicates that the consolidation activity is likely to continue and it can also turn into minor correction. This also clearly indicates that no run-away rise in the Markets is likely to be seen in this week and it also further indicates that there are possibilities that the Markets may weaken further as the week goes by.

All and all, the levels of 5377 have become a immediate top for the Markets and fresh and sustainable up move can occur only if the Markets moves past these levels. Until then, range bound and volatile movements shall occur and bouts of profit taking would continue to be seen. While remaining highly selective during this phase of the Markets, cautious approach should be adopted today, and for the coming week if these technicals are to remain constant.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331