MARKET
TREND FOR TODAY October 11, 2012
The Markets
continued with the correction yesterday, though it made an intermittent
attempt to recover but finally went on
to end the day with losses. The Markets opened negative following weak
technicals and subdued global cues and traded initially with capped losses. The
Markets lost some further ground but in the mid session, it saw a bout of some
recovery on back of short covering. However, that remained short lived as the
Markets lost further ground as it went on to give it’s day’s low of 5647.05. The
Markets did not recover much from those levels as it finally ended the day at
5652.15, posting a net loss of 52.45 points or 0.92%, forming a lower top and
lower bottom on the Daily High Low charts.
Today, we
can expect a moderately positive opening in the Markets. The intraday
trajectory that the Markets forms would be very important today as all
technical indicators and the patterns on the Charts point towards continuation
of the corrective activities in the Markets.
The levels
of 5630 would be immediate support for the Markets and the behaviour of the
Markets vis-à-vis those support levels would be important. Any breach below
5630 will see the weakness deepening in the Markets.
The RSI—Relative
Strength Index on the Daily Chart is 57.0274 and it has reached the lowest
value in last 14-days which is BEARISH.
The RSI has set a new 14-period low whereas
NIFTY has not yet, and this is BEARISH DIVERGENCE. The Daily MACD is now
trading below its signal line.
Having said
this, it is further important to note that the NIFTY Futures have shed over 6
lakh shares in Open Interest and this clearly indicates long unwinding in the
Markets. Unless we see any fresh buying, this may cause the corrective activities
in the Markets to continue bit longer. The NIFTY PCR stands at 0.99.
All and all,
the behaviour of the Markets vis-à-vis the levels of 5630 would be important.
The Markets will have to remain above this level in order to avoid further
weakness. Any dip below this will make the Markets weaker. While remaining
ultra selective while taking positions, profits should be protected on either
side. Overall, cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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