Friday, January 27, 2012
MARKET TREND FOR TODAY January 27, 2012
The Wednesday’s session remained dominated with rollover centric activities as the Markets ended the day with gains continuing its up move but spent the second half of the session quite directionless. The Markets opened on a positive note but soon pared its gains to trade flat. However, it reversed and remained in mildly rising trajectory maintaining modest gains. The Markets gave its intraday high of 5174.15, but ended the day at 5158.30, posting a modest gain of 30.95 points or 0.60%. With this, it has continued to form a higher top and higher bottom on the Daily High Low charts.
The today’s analysis remained more or less like that of Wednesday but with added quantum of caution in it. The Markets have continued with its up move on Wednesday, but it has done so while being in “overbought” territory and this can be a cautionary sign in the Markets.
The Markets are expected to open on a mildly negative note and look for directions. The intraday trajectory would continue to remain critically important. For today, the levels of 5175 and 5205 shall act as resistance and the levels of 5100 and 5065 shall act as supports.
The January Series of NIFTY saw it rise by over 500 points. Though the rally in the last couple of sessions has remained liquidity driven, it is now “Overbought” while it continued to rise on Wednesday and such technical signs cannot be ignored. The RSI—Relative Strength Index on the Daily Chart is 73.8277 and it continues to remain in “overbought” range. It does not show any negative / positive divergence. The Daily MACD remains bullish as it continues to trade above its signal line.
Having said this, as mentioned above, even though the rally is supported by lot of liquidity, the technical indicators being in overbought range cannot and should not be ignored. Further, all key components of NIFTY have shown decline in Open Interest with the rise on Wednesday, which is a clear indication that some correction / profit taking is imminent in the Markets.
Today, there are all chances that even though the Markets trade in positive, correction / profit taking, even though it may be short lived can creep in. We advice at this juncture to avoid aggressive long positions and vigilantly protect profit at higher levels. Purchases, if any, should be made on highly selective basis in Non-NIFTY stocks. The Markets have risen with small movements between Open and Close – which are known as small real bodies on the Candles, indicates potential discomfort on the Charts. All and all, a cautious outlook is advised for today.
Consulting Technical Analyst,
Wednesday, January 25, 2012
MARKET TREND FOR TODAY January 25, 2012
The Markets gave a thumbs-up reaction to the 50-basis points CRR Cut by the RBI wherein it was expected to keep it unchanged. The Markets opened positive , and spent the initial session in a very capped and narrow range. However, post the CRR Cut, the Markets saw a sharp spurt led by banking and auto stocks and it went on to give its day’s high of 5141.05. It moved sidewards in a range in the last hour of the trade. It came off a bit and ended the day at 5127.35, still posting a decent gain of 81.10 points or 1.61%. In the process, it has formed a sharply higher top and bottom on the Daily High Low Charts.
For today, technically speaking, the Markets are expected to open on a positive note and continue with its up move, at least in the initial trade.
Thus, for today, we can again expect a positive opening and then the Markets are expected to look for directions, today, the intraday trajectory playing a very important role in deciding the trend for today. For today, the levels of 5160 and 5205 shall act as resistance and the levels of 5090 and 5040 are immediate supports.
Having said this, there are three important points to note here. First of all, with yesterday’s rise, the Markets are now OVERBOUGHT. The RSI—Relative Strength Index on the Daily Chart is 72.36 which is in OVERBOUGHT range. Secondly, at current levels, the Markets are near a long term falling trend line drawn from its life time high levels of 6388, joining 6178, 5700 and 5200. This is also likely to pose resistance. Thirdly, the Markets have its 200-DMA of 5212 which will certainly cap the upside from thereon.
Thus, from the above reading, it can again be fairly concluded that the upside from the current levels would be fairly limited as we have two important resistance at current levels and another one little on the upside. Further more, today is the expiry day (tomorrow being a holiday) and thus we will also see the session remaining dominated with rollover centric activities.
Having said all this, it is very much likely that we see positive opening today. However, after the positive opening and trade in the initial session, there are chances that the Markets are consolidates or comes of a bit on account of profit taking. It is thus advised to refrain from taking any aggressive long positions in the Markets while vigilantly protecting profits at higher levels. Overall, cautious outlook is advised for today.
Consulting Technical Analyst,
Tuesday, January 24, 2012
MARKET TREND FOR TODAY January 24, 2012
The session yesterday remain precisely as analysed as the Markets consolidated near the mentioned resistance levels and ended the day flat. The Markets opened on a negative note but soon moved into the positive territory and gave its intraday high of 5059.55. Thereafter, it spent the entire session in a very capped and narrow range and in between kept moving in and out of the positive territory. The Markets spent the entire session in a consolidating sideward movement and finally ended the day at 5046.25, posting a net loss of 2.35 points or 0.05%. In the process, it formed a parallel bar on the Daily High Low Charts, forming a similar top and similar bottom.
For today, we can expect the consolidation to continue and thus, the analysis for today remains more or less similar to what was carried out yesterday. For today, expect the Markets to open on a mildly positive note and look for directions. It is expected to open mildly positive and trade in a capped range, at least in the initial trade.
Today, RBI is set to announce its Monetary Policy and the Markets shall react to that. The overall Markets remain divided on the CRR cuts and thus, we may see the Markets reacting sharply to it either way, though there are equal chances of it remaining a non-event. Further to this, just two sessions remain for expiry and thus, we would also see the session dominated with rollover centric activities today also.
For today, the levels of 5100 remains an important resistance and the supports are expected at 5010 and 4970 levels. The RSI—Relative Strength Index is 67.99 on the Daily Charts and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bullish as it trades above the signal line.
As indicated above, the rollover centric activities to continue. Both NIFTY and Key Stocks have reported rollovers in excess of 50% so far and the NIFTY PCR remains at 1.61. Any upside in the NIFTY will make it nearly overbought and this keeps the broad analysis similar to that of yesterday. It is advised to avoid aggressive exposure on either side and continue to protect profits. Even though in case of any positive surprise with CRR cut, it is still advised to avoid aggressive long positions and protect profits at higher levels. Overall, cautious outlook is advised for today.
Consulting Technical Analyst,
Monday, January 23, 2012
MARKET TREND FOR TODAY January 23, 2012
The Markets continued with its up move in the half hour of the day it saw a very sharp pullback from its day’s low to end the day with gains. The Markets opened on a positive note, but as expected in our previous edition of Daily Market Trend Guide, it formed a falling trajectory after initially trading in a capped range. In the second half of the day, it slipped from its positive territory and went on to trade in the red. It also gave its intraday low of 5004.30. However, in the last half hour of the trade, it saw a very sharp pullback on short covering as it not only gave the day’s high of 5064.15, but ended the day at 5048.60, posting a gain of 30.20 points or 0.60%. The Markets went on to form a higher top and higher bottom on the Daily High Low Charts. With this, the Markets have ended the week with net gains of 182.60 points or 3.71%.
This week, we are likely to see Markets taking a breather from last two weeks of very nice performance.
For today, expect a sedate and quiet start to the Markets. Barring India and Japan, rest of the five Markets, i.e. Taiwan, Hong Kong, Singapore, Korea and China are shut due to lunar new year. To add to this, we have Thursday as a holiday due to Republic day and thus, all this is likely to keep the Markets sedate and quiet on low volumes. For today, the levels of 5075 and 5090 are likely to act as resistance and the levels of 5005 and 4960 are immediate support on the Charts. The RSI – Relative Strength Index on the Daily Chart is 68.2834 and it has reached its highest value in last 14-days which is bullish. It does not show any positive or negative divergence. The Daily MACD continues to remain bullish as it trades above its signal line.
On the Weekly Charts, the RSI is 50.6660 and is neutral as it shows no negative divergence or failure swings. The levels of 5100 continues to act as resistance on the Weekly Charts. The Weekly MACD has turned bullish as it has reported a positive crossover.
Given the above reading, it can be fairly concluded that the Markets may not see very sharp correction, but they are likely to see some consolidation or some profit taking in the immediate term, while keeping its overall trend intact. This is likely to keep this truncated week little low on volumes, range bound and also bit volatile. Also, this being rollover week, with one day less, (Thursday being a holiday), we may see the sessions dominated with rollover centric activities.
All and all, the trend remains intact, but consolidation and mild profit taking cannot be ruled out. Purchases may be made, but very selectively and it has become all the more important to protect long profits at higher levels. Overall, cautiously positive outlook is advised for today.
Consulting Technical Analyst,