Monday, October 15, 2012

Daily Market Trend Guide -- Monday, October 15, 2012


MARKET TREND FOR TODAY                                     October 15, 2012

After witnessing a heavy short covering on Thursday, the Markets on Friday continued with their corrective actions, quite on expected lines. The Markets opened on a  moderately negative note and traded in a capped range. In the later part of the morning trade, it did made an attempt to recover as it went in the green as it gave its day’s high of 5725. It could not sustain those levels however and dipped into the red again. The Markets then transformed them into falling trajectory for the rest of the session and kept losing ground gradually. It gave its intraday low of 5659.35 and finally ended the day at 5676.05, posting a net loss of 32 points or 056%, as it formed a similar top and slightly higher bottom on the Daily High Low charts.

 Today, expect a quiet and listless start to the Markets. The Markets are expected to open on a quiet and mildly negative note and look for directions. The intraday trajectory would be crucial to determine the trend and the correction in the Markets is likely to continue and the movement is expected to remain range bound.

The Markets shall have a major support around 5630 support levels and below that, next support would exist lower at 5560.

The RSI—Relative Strength Index on the Daily Chart is 57.7696 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line and thus continues to remain bearish.

On the Weekly Charts, the RSI is 63.8680 and here too, it remains neutral with no failure swings or bearish / bullish  divergences. The weekly MACD continues to trade above its signal line.

In the previous session, the NIFTY has further went on to shed 4.98 lakh shares or 1.97% in Open Interest. This signifies that there has been further long unwinding and such unwinding has continued in the last 2-3 sessions.

Having said this, there are all chances that even with some intermittent pullbacks, the Markets may overall remain in a range and with a downward bias. The behavior of the Markets vis-à-vis the levels of 5630 would be important and any downward breach will induce further weakness. While remaining light on the positions, caution is advised for today.

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


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