Friday, September 14, 2012

Daily Market Trend Guide -- Friday, September 14, 2012

MARKET TREND FOR TODAY

The Diesel Price hike which has  come unexpected and the extension of QE by the Fed Reserve has set the stage for a gap up opening today. We are all set to see a strong gap up opening and the key would be to see if the Markets sustains the opening gains and capitalizes on strong opening further during the day.

Today's opening will have the Markets open above its resistance levels of 5448-5455. Next resistance on charts are at 5498-5500 levels. This too is a major pattern resistance.

The RSI--Relative Strength Index on Daily Chart is 64.6302 and it has reached its highest value in last 14-days which is bullish. The Daily MACD trades above its signal line.

Having said this, it is important to note that the QE - Quantitative Easing would be cheered by the global markets but it has been good for India only for short term. If we take a medium term view, the result of influx of funds have caused macro economic concerns fueling inflationary concerns. This may desist RBI from announcing immediate rate cuts on this Monday's monetary policy review.

Further to this, on the contrary, Markets are likely to cheer diesel price hike more as this is seen as a bold move towards fiscal consolidation. The Markets will also see if there are no rollback pressures and if they are, the Centre does not relents to such pressures.

All and all, positive session ahead. Selective purchases may be made and wherever profits are available, they should be protected at higher levels.  Overall, positive outlook is advised for today.
 
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
 

Thursday, September 13, 2012

Daily Market Trend Guide -- Thursday, September 13, 2012

MARKET TREND FOR TODAY                                                              September 13,2012
The Markets continued its up move on fifth day in a row but remained utterly volatile as it reacted more the German Court’s verdict than the IIP numbers which were a non event today. The Markets opened on a positive note and traded in a capped range even the IIP numbers came out. It continued to remain in a range but reacted violently just before the German Constitutional Court started with its verdict. It saw a wild two way movement but towards the end, went on to give the day’s high of 5435.55. It ended the day at 5431, posting yet another decent gain of 41 points or 0.76% while forming a higher top and higher bottom on the Daily High Low Charts.

Today, we can expect the Markets on a flat to mildly negative note and consolidate after five days of gains. The Markets are not yet out of its filter of resistance levels of 5400 and they are still below its double top resistance of 5448-5450 and thus, can consolidate or mildly correct from these levels. The intraday trajectory would continue to remain critically important.

The levels of 5448-5460 shall act as resistance for today.

The RSI—Relative Strength Index on the Daily Chart is 64.2480 an it has reached its highest value in last 14-days which is bullish. However, it does not show any bullish / bearish divergence. The Daily MACD continues to trade above its signal line. The volumes have remained bit higher than the average.

The NIFTY and Stock futures have continued to add nominal open interest and the NIFTY PCR now stands at 1.06 as against 1.01. The another external even that global markets look forward to is the announcements from Fed Reserve coming up tonight.

However, so far as technical factors go, the Markets are likely to consolidate / mildly react at these levels. In such case, at this point, aggressive long positions should be avoided and selective approach should be maintained as only selective outperformance would be seen until Markets achieves a full break out on the upside. Volatility shall stay and occasional profit taking bouts cannot be ruled out. Careful outlook is advised for today.

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


Wednesday, September 12, 2012

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

MARKET TREND FOR TODAY                                                      September 12, 2012
Markets saw relative out performance as compared to its Asian peers on stronger European beginning as it recovered smartly from its opening and day’s lows and ended the session with modest gains for fifth day in a row. The Markets opened on a negative note and it traded negative in the first half of the session while giving day’s low of 5332.10 in the early morning trade. Thereafter, while trading in a capped range, the Markets made feeble attempts to recover and in the mid afternoon trade, it traded near its previous day’s close. In the last hour and half of the trade, the Markets saw further strength coming in as it went on to give the day’s high of 5393.35. It finally ended the day at 5390, posting a modest gain of 26.55 points or 0.50% while forming a higher top and lower bottom on the Daily High Low Charts.

The Markets are poised at a very critical juncture now. The expected positive opening will make the Markets open in between its resistance zone. The lead indicators show a contradictory picture. Further the external happenings too show contradiction to react to. Positive opening is expected but it would be critical to see the behavior of the Markets if 5400-5460 zone and it would be critically important for the Markets to sustain above the levels of 5400-5410.

The levels of 5410 and 5448 are immediate resistance levels on the Charts.

The RSI—Relative Strength Index on the Daily Chart is 60.5137 and it shows no failure swing. But the NIFTY has set a new 14-day high but RSI has not. This is BEARISH DIVERGENCE. On the other hand, the Daily MACD has reported a positive crossover and it now trades above its signal line. This is a contradictory reading.

Further to this, Markets have react to the IIP numbers coming out today, which are expected to be mildly positive. Again, on the  other hand, the possibilities of immediate Petrol and Diesel price hike have been ruled out by the core committee. This is again a negative.

So, there are contradictions to react to on the technical charts as well as the externals. So, the key would be to see if the Markets moves past the resistance zone of 5410-5448 or it again consolidates and gives up later.

All and all, given these contradictions, there are chances of Markets remaining volatile over and above being in a range. Though shorts may strictly be avoided, occasional bouts of some minor profit taking cannot be ruled out. Aggressive buying too should be avoided while vigilantly protecting profits. Overall, cautious outlook is continued to be advised for today.

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


Tuesday, September 11, 2012

Daily Market Trend Guide -- Tuesday, September 11, 2012

MARKET TREND FOR TODAY                                                                  September 11, 2012
The Markets spent the session in positive consolidation as it traded volatile, but in a capped range to end the day with nominal gains. The Markets opened on a positive note traded in extremely capped range. After giving day’s high of 5375.45 in the afternoon trade, the Markets saw some sudden paring of gains. It pared all of its gains to trade flat and also dipped further into negative to give the day’s low of 5349.10. The Markets recovered from those levels, however, but traded again in extremely capped range. It finally ended the day at 5363.45, posting a nominal gain of 4.75 points or 0.09%, forming a higher top and higher bottom on the Daily High Low Charts.

Today also, we are likely to see a modestly negative opening as the Markets might consolidate or show some little profit taking after closing into green since last four sessions. In even of consolidation, intraday trajectory would be critically important and so will be the Market breadth and the volumes.

The levels of 5400 would continue to pose as immediate pattern resistance with supports coming in at 5330 and 5305.

The lead indicators do not point and directional trend. The RSI—Relative Strength Index on the Daily Chart is 57.8675 and it is neutral as it shows no bullish / bearish divergence or failure swings. The Daily MACD continues to trade below its signal line.

Further, if we look at F&O Statistics, the NIFTY futures have shed over 16.50 lakh shares in open interest and the stock futures too have shed over 37 lakh shares in Open Interest. This signifies little profit taking yesterday from the day’s high, but at the same time, the volumes have remained lower than average. This typically signifies consolidation. The NIFTY PCR stands at 0.96 as against 0.97.

Given this reading, we are once again likely to see a range bound session again with no directional trigger. Consolidation might continue and this is likely to keep the Markets range bound and bit volatile.  Baring a minor correction for a day or two, the overall bias remains upside with the 5400 acting as immediate major pattern resistance. While avoiding shorts, profits too should be protected at higher levels. Overall, cautious outlook is advised for today.

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


Monday, September 10, 2012

Daily Market Trend Guide -- Monday, September 10, 2012

MARKET TREND FOR TODAY                                                   September 10, 2012
The Markets had a truncated short session on Saturday to test the NSE’s backup systems. Normally such sessions are often directionless and listless but this session on Saturday remained buoyant as it remained in one upward direction with buying seen as the Markets ended with modest gains. The Markets opened on a positive note and remained so for the rest of the session. The Markets saw more strength towards the end of the session as it went on to give its day’s high of 5366.30. It finally ended the day at 5358.70, posting a modest gain of 16.60 points or 0.31%. It has formed a higher top and higher bottom on the Daily High Low Charts.

Today, expect the Markets to open on a flat to mildly positive note and look for directions. Technically speaking, Markets are expected to open positive as continue with its up move as they have ended the previous session near the high point of the day. Thus, positive opening can be expected but intraday trajectory would equally be important.

For today, the levels of 5380 and 5400 would continue to pose immediate resistance to the Markets.

The RSI—Relative Strength Index on the Daily Chart is 57.3931 and it is neutral as it shows no negative / positive divergence or failure swings. The Daily MACD still continues to trade below its signal line. The Weekly RSI too is neutral at 56.3420. The Weekly MACD is bullish as it trades above its signal line.

The NIFTY and Stock Futures have continued to add in net Open Interest.

The overall reading of the lead indication and F&O statistics can be that the bias of the Markets can be neutral to mildly bullish. However, the levels of 5400 shall continue to remain a important pattern resistance, the levels from where the Markets had corrected last time. So, significant up move shall occur only after the levels of 5400 are breached on the upside. We may again see the Markets consolidating at those levels.

All and all, mildly positive bias can be maintained. The levels of 5400 will continue to pose immediate resistance and thus, continuation of selective approach in the Markets is advised along with protection of profits at higher levels. Shorts should be avoided. Overall, positive approach with tinge of caution is advised for today.

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