Wednesday, December 5, 2012

Daily Market Trend Guide -- Wednesday, December 05, 2012

MARKET TREND FOR TODAY                                                       December 05, 2012
The Markets had a range bound but utterly volatile session as the Markets spent the entire session in a very capped range, but still ended the day with moderate gains on the recovery it saw in the last hour of the trade. The Markets opened moderately negative and after trading in a capped range, it inched up further. However, in the afternoon trade, it lost some ground, dipped into negative to give its intraday low of 5859. The Markets saw some last hour short covering towards the end. It attempted to recover from its lows, went in the green to give the day’s high of 5894.95. It came off a bit again from those levels and finally ended the day at 5889.25, posting a moderate gain of 18.30 points or 0.31% while forming a almost parallel bar on the Daily High Low charts.

Today, on back of flat to moderately positive global cues, expect a similar moderately positive opening in the Markets but for the first time, the lead indicators have started showing signs of potential short term weakness. The intraday trajectory that the Markets form shall continue to remain critically important and there are chances of weakness creeping in as we go ahead in the session.

For today, the levels of 5900 and 5930 shall act as immediate resistance and the supports come in much loser at 5825 and 5770.

The lead indicators point towards possibilities of short term weakness creeping in. The RSI—Relative Strength Index on the Daily Charts 71.6941 and is continues to remain in “OVERGOUGHT” territory. Though it does not show any failure swings, the NIFTY has set a new 14-day high but the RSI has not and this is “BEARISH DIVERGENCE”. The Daily MACD continues to trade above its signal line.

On the Candles, engulfing bullish pattern has occurred. If this occurs during an uptrend, which is the case with NIFTY, it may be a last engulfing top which indicates a potential top formation. However, this needs confirmation.

On the Derivative side, the NIFTY Futures Open Interest has remained almost unchanged with nominal addition of 0.19% or just over 36000 shares. The NIFTY PCR stands at 1.07 as against 1.10 yesterday.

All and all, the positive opening is likely but there are equal chances that we may see some weakness creeping in at later stage. It is very strongly recommended that the fresh buying in aggressive manner should be avoided. The Markets saw reactionary up move to the developments in parliament on retail FDI front, but still no sustainable up move shall occur until the Markets moves past 5930 levels. While avoiding fresh buys, cautious outlook is continued to be advised.

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


No comments:

Post a Comment

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