MARKET TREND FOR TODAY
October 10, 2012
Markets had an terribly volatile session yesterday and on
expected lines, declined from its day’s high though it still managed to end the
day with moderate gains. The Markets opened positive following favourable
global cues and in the mid session, gave its intraday high of 5728.65. However,
in the second half of the session, Markets saw some pressure coming in and it
started a gradual decline. It not only came off its highs, but pared all of its
gains to trade briefly into negative giving day’s low of 5677.90. It managed to
recover a bit from its lows and finally ended the day at 5704.60, posting a net
gain of 28.60 points or 0.50%. It formed a lower top and higher bottom on the Daily High Low
charts.
The Markets are likely to open on a moderately negative note
and look for directions. The up move that we saw yesterday may prove itself to
be just intermittent pullback and the Markets are likely to continue with their
corrective activity which it began again in the second half of the session
yesterday.
While the levels of 5750 may act as immediate resistance for
the Markets, the immediate support for the Markets is likely to come in at
around 5630 levels, a top which it breached on the upside on its way up.
The RSI—Relative Strength Index on the Daily Chart is
63.2046 and is neutral as it shows no negative divergence or failure swings.
The Daily MACD has reported a negative crossover and it now trades below its
signal line. This is bearish.
Stock Options have shown a mixed trend in Open Interest as
some index components have shown minor addition, but most have shown shedding
in Open Interest. This indicates that some unwinding is likely to continue. The
NIFTY PCR stands at 1.03.
Having said this, it can be concluded that the Markets are
not completely out of the woods as of
today. In spite of some intermittent pullbacks that may be seen, overall, the
Markets are likely to continue with their corrective activity and are likely to
test the support levels of 5630, a double top neckline which it breached on the
upside.
All and all, given this situation, while making new
purchases highly selective approach should be adopted, though aggressive positions
may still be avoided. Overall, continuance of cautious approach is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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