Friday, December 21, 2012

Daily Market Trend Guide -- Friday, December 21, 2012

MARKET TREND FOR TODAY                                                 December 21, 2012
Yesterday was a terribly directionless day for the Markets once a gain and it paned out exactly as analysed in our yesterday’s edition of Daily Market Trend Guide as the levels of 5950-5960 continued to act as key resistance levels. The Markets opened on a moderately negative note and gave its intraday high of 5937.60 in the early minutes of trade and after briefly trading in a range, slipped further to give the intraday low of 5881.45. However, in the rest of the session, the Markets did came off its highs almost near its previous day’s close but in the end slipped again to finally end the day at 5916.40, posting a modest loss of 13.20 points or 0.22%. It formed a similar top and lower bottom on the Daily High Low charts.

The levels of 5950 have held out as support and they are likely to do so today also as the Markets are again expected to open on a flat to mildly negative note and look for directions. The Markets have failed to achieve any positive breakout and therefore have continued to remain in a broad trading range that they were in. The intraday trajectory would be important to dictate the trend for today.

As always, the levels of 5950-5960 shall act as critical and major resistance levels for the Markets. The supports come in at 5860 and 5820 levels.

The lead indicators point towards negative bias again. The RSI—Relative Strength Index on the Daily Chart is 64.1805 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD has once again reported a negative crossover and it now trades below its signal line which is bearish. On the Candles, An Engulfing Bearish Line has occurred. The Engulfing Bearish Pattern is bearish during an uptrend, which is clearly the case with NIFTY. This signifies and points towards short term weakness in the Markets.

On the derivative front, the NIFTY Futures have shed over 17.65 lakh shares or 8.25% in Open Interest. This very clearly signifies unwinding of positions. The NIFTY PCR stands unchanged at 1.08.

It can fairly be concluded from the above reading that the Markets are just not completely out of the woods at all and no sustainable rally can be expected. As being often repeated, this shall occur only above the levels of 5950.

All and all, the bias remains neutral to negative today. No fresh longs should be added aggressively with this reading in the Markets even if it sees temporary up move. Volatility shall remain ingrained in the Markets as it continues to trade in a range. While protecting profits vigilantly, cautious outlook is again advised for today.

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

   

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.