MARKET TREND FOR TODAY
December 19, 2012
The Markets had an utterly volatile session yesterday
wherein in opened on a flat to mildly positive note but reacted negatively as
it touched its day’s low of 5823.15 to the RBI Rate announcements wherein the
rates were kept unchanged. However, in the second half, it saw equally sharp
short covering as it reacted to the passing of the Banking Amendment b ill in
the Loksabha. It went on to move back into the positive territory and give the
intraday high of 5905.80. However, the Markets continued to remain in the broad
trading range that they are in and ended the day at 5896.80 while forming a
higher top and lower bottom on the Daily High Low Charts.
For today, again expect a moderately positive opening for
the Markets and the Markets shall look for directions heavily depending upon
the intraday trajectory that it forms post opening. Though the Markets have
ended the day near the high point of the day, they are still very much within
the broad range that they have been trading in.
For today, since the Markets are still in the broad range
that they have been trading in, the levels of 5920 and 5950 shall continue to
act as immediate resistance. The supports come in at 5820 and 5775 levels.
The RSI—Relative Strength Index on the Daily Chart is 63.4435
and is neutral and it shows no bearish / bullish divergence or failure swings.
The Daily MACD continues to remain bearish as it trades below its signal line.
Having said this, on the Derivative front, NIFTY futures have
shed in total Open Interest. The NIFTY PCR stands at 1.07 as against 1.05.
Again, as we have been repeatedly mentioning in our previous
editions of Daily Market Trend Guide, the Markets are still within the broad
trading range. It will have to move past the levels of 5950 to have a
sustainable rally and a positive breakout. Until this happens, it shall
continue to trade in this manner in a broad range with volatility ingrained in
it.
Yesterday, what we saw was a knee jerk reaction to both the
RBI Rate announcements which kept the Repo, Reverse Repo and CRR unchanged and
the passing of the Banking Amendment Bill. Both of these reaction were quite
knee jerk and it overall affected a sectoral out performance. The broader
Markets still continue to remain in a overall range.
All and all, since the Markets continue to remain in similar
range, the analysis too remains almost similar. While avoiding aggressive
positions and protecting profits on either side, selective buys can be made
while maintaining a positively cautious outlook on the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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