MARKET TREND FOR TODAY
December 31, 2012
The session on Friday again saw a bout or sharp recovery
towards the end after spending the session in a listless manner and ended the
day with modest gains. The Markets opened on a positive and higher note on
Friday but after briefly trading in a capped range, slowly transformed into
falling channel and kept gradually losing ground. The Markets pared almost all
of its opening gains as it gave a day’s low of 5879.50. Though it never dipped
into negative, it pared all of its opening gains in the day’s trade. However,
in the last half an hour of the trade, the Markets saw a very sharp recovery,
probably on account of short covering. The Markets regained all of its lost
gains and gave the day’s high of 5915.75. It finally ended the day at 5908.35,
posting a modest gain of 38.25 points or 0.65% while forming a lower top and
higher bottom on the Daily High Low Charts.
Today, we enter into the last trading session for the year
2013 when the Global Markets are closely watching the developments in the US
over the fiscal cliff issue. Markets are expected to open on a flat to mildly positive
note again. The Markets are still very much within the broad trading range that
they have been trading in. Therefore, the opening of the Markets, and its behaviour
vis-à-vis the critical resistance levels shall be crucial to decide the trend
for the Markets.
For today, the levels of 5940-5950 shall continue to act as
key resistance levels for the Markets. The supports come in at 5850 and 5810
levels.
On the Daily Charts, the RSI—Relative Strength Index is
58.9432 and it is neutral as it shows no bearish or bullish divergences. It
also does not show any failure swings. The Daily MACD is bearish as it trades
below its signal line. On the Weekly Charts, the RSI is 66.6720 and it does not
show any failure swings. However, the Weekly RSI has reached its lowest in last
14-weeks which is bearish. The Weekly MACD continues to remain bullish while
trading above its signal line.
On the derivative note, the NIFTY Futures have shed over
1.33 lakh shares or 0.81% in Open Interest. This signifies that the last hour
spurt that we saw in the Markets was more of a short covering than any fresh
buying. The NIFTY PCR stands at 1 as against 0.88.
From the above reading, it is clear that the Markets have a
neutral to mildly negative bias until we move past the levels of 5940-5950 in a
convincing manner and give a sustainable upward breakout. Until this happens,
the Markets will trade in a range with a downward bias and the volatility in
the Markets shall refuse to go away. Also, the pending US Fiscal cliff issue
will be closely observed and reacted to by the Global Markets and this will
have its effect on Indian Markets.
Again speaking purely on technical grounds, no up move
can be expected until we move past the
5940-5950 levels. Until this, it is advised to remain very selective and light
on positions while protecting profits vigilantly at higher levels. Overall,
mildly positive approach with high degree of
caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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