Friday, February 10, 2012
MARKET TREND FOR TODAY February 10, 2012
The Markets continued to rise in the last half hour of the trade as it has been doing in the last couple of session and ended the day again with modest gains. The Markets opened on a negative note and gave its intraday low of the day at5338.90 in the morning trade. The Markets almost entire session in the negative territory in the range bound and little volatile manner as expected. However, the last half hour of the trade saw a vertical spurt as it ended the day at 5412.35 posting yet another gain of 44.20 points or 0.82%. The volumes remained near average and the Markets formed a higher top and almost similar bottom on the Daily High Low charts.
For today, expect the Markets to open on a moderately negative note and look for the trend. The levels of 5400-5410 shall be of critical importance today as they have been acting as immediate resistance. The opening above the levels or moving past above the levels of 5420 may see some strength in the Markets even if the Markets are extremely “overbought” and thus this levels continue to be dangerous especially as there has been no correction. For today, the levels of 5420 and 5450 shall act as resistance and the levels of 5350 and 5290 shall act as immediate support. The opening below the levels of 5400 may see the Markets resisting at 5400-5410 levels.
Having said this, the lead indicators of the Markets continue to remain extremely “Overbought”. The RSI—Relative Strength Index on the Daily Chart is 75.2424 and continues to show a clear “bearish divergence” as NIFTY has made a new 14-day high but the RSI has not. The Daily MACD continues to trade above its signal line.
The FIIs have for the first time have remained net sellers, though of a nominal amount. The movement in the currency too showed some bias towards impending correction. If the Markets moves above 5400, as per pattern analysis, it would be another breakout but we are absolutely sceptical with regard to the sustainability of such a breakout (move above 5400) as the lead indicators have remained unsustainably “overbought”. Such wild move above the levels of 5400 may lure the investors to try and further catch the rally but we continue to should high degree of caution and advice to stay away from such technically dangerous frenzy of up move. The Markets have seen up move of over 750 points in NIFTY and this has occurred with very little amount of consolidation, and thus desperately needs a correction, even if it intends to reverse its overall trend.
Overall, very selective action in stocks advised with continuing to very vigilantly protect profits at higher levels. Aggressive exposure in any form should be avoided. Overall, high degree of caution is advised for today.
Consulting Technical Analyst,
Thursday, February 9, 2012
MARKET TREND FOR TODAY February 09, 2012
The Markets continued to rise on liquidity while remaining heavily “overbought” and continued to end the day with modest gains after a very volatile session. The opened on a flat note and after briefly trading in a capped range, went on to give intraday high of 5396.90. However, post this high, in the second half of the session, the Markets saw a sudden paring of gains as it saw a bout of profit taking and went on to briefly trade into the negative territory. However, again, as it has been happening over past couple of sessions, the Markets saw a sharp recovery from its lows and finally ended the day at 5368.15 posting yet another modest gain of 33 points or 0.62%. In the process, it has formed a Parallel Bar, i.e. almost similar top and bottom on the Daily High Low Charts.
For today, expect the Markets to open on a moderately negative note and trade in negative at least in the initial trade and look for directions. Some indications of weariness have started creeping in as evident from yesterday’s volatile intra day behaviour and this is likely to weigh in a bit today, following void in any concrete development in the Greece Debt matter, especially when the technicals remain very “overbought”.
For today, the levels of 5400-5410 shall continue to act as resistance and immediate top until the time it is breached with the supports coming in as low as 5290 and 5210.The technicals continue to remain “overbought”.
The RSI—Relative Strength Index on the Daily Chart is 73.4303 and it continues to remain in “overbought” range. The NIFTY again reported its 14-day high but RSI has not and this is “Bearish Divergence”. The Daily MACD continues to remain above its signal line.
All and all, the analysis for to day again remains more or less as that of yesterday. Some signs of individual corrective activities (stock specific) are seen today also, we can expect such trend to continue with bias towards some correction, which is long overdue and the absence of which is making the Markets unhealthy and dangerous. There are chances that volatility may remain and we may see some sharp profit taking bouts as seen yesterday. However, it should be noted that large cash flows and with the Markets being in “overbought” range, it also increases the sharp speculative movements triggered by few large players in the Markets. We continue to reiterate to avoid any significant and aggressive positions in the Markets as they continue to remain “overbought” and exercise high degree of caution for the day.
Consulting Technical Analyst,
Wednesday, February 8, 2012
MARKET TREND FOR TODAY February 8, 2012
The Markets did show some signs of weariness today as it ended the day with modest losses after a volatile session. The Markets opened on a positive note on global cues and gave its intraday high of 5413.35 in the early seconds of the trade. It however spent the first half of the session in a capped range with limited gains. It dipped into the red in the final leg of the session to give its day’s low of 5322.95. It hovered around those levels until the end of the session and ended the day at 5335.15, posting a modest loss of 26.50 points or 0.49%. It the process, it has formed a higher top but lower bottom on the Daily High Low charts.
For today, expect the Markets to open flat to mildly positive again and look for directions. The consolidation is overall likely to continue as the level of 5400-5410 as a pattern resistance in form of Double Top continues to act as immediate top for the Markets.
Having said this, the levels of 5390 and 5410 are likely to act as resistance today and the levels of 5290 and 5230 may act as supports.
The RSI—Relative Strength Index on the Daily Chart is 72.0100 and it continues to remain in “overbought” and is neutral as it does not show any negative divergence or failure swing. The Daily MACD continues to trade above its signal line. On the Candles, A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are "high," it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trend line, or price resistance level), the long black candle adds credibility to the resistance.
The Markets did react to the possibility of slowdown in GDP growth on expected lines. The indications for a consolidation / correction were seen in the broader markets yesterday. Today also, in the second half of the session, we may also see the Markets reacting to the European markets as action on Greek debt may come today. Discussing all this external factors, the bottom line is that the technicals clearly indicates continuation of consolidation / corrective phase in the Markets. The levels of 5400-5410 has become an immediate top and with the Markets remaining in “Overbought” range, no sustainable rally shall occur until the Markets moves past these levels and also at the same time, ceases to be in “overbought” territory.
All and all, continuation of cautious outlook is advised for today. Very selective stock specific purchases may be made but profits too should continued to be protected on either side. Overall, high degree of caution is advised for today.
Consulting Technical Analyst,
Tuesday, February 7, 2012
MARKET TREND FOR TODAY February 07, 2012
The Markets continued to post modest gains for the fifth session in a row despite being oversold and with bearish divergence on the Daily Charts. The Markets opened a positive note on global cues and in the morning trade itself gave its intraday high of 5390.05, which is also a pattern resistance in form of a Double Top. The Markets then pared all of its gains to trade almost flat by late afternoon trade. However, it maintained its “tradition” of a structured pullback as it recovered in last half hour of the trade to finally end the day at 5361.65, posting a modest rise of 35.80 points or 0.67%. It has continued to form a higher top and higher bottom on the Daily High Low Charts.
For today, expect the Markets to open again on modestly positive note and look for directions. The Markets will grossly depend upon the intraday trajectory which we saw in a falling channel for the entire session yesterday, which can be a mild sign of weariness in the Markets. The Markets have resisted near 5400 levels, which is a pattern resistance as shown in the Chart above in form of a Double Top and this shall act as immediate top for the Markets.
Though it may seem repetition of what we have been mentioning in last couple of editions, the Markets continue to remain grossly “overbought” and quite stretched out . For today, the levels of 5400-5420 shall act as resistance and the levels of supports are seen as low as 5270 and 5210 levels.
The RSI—Relative Strength Index on Daily Chart is 74.9995 and continues to remain in grossly “overbought” range. Also, it continues to show “Bearish Divergence” as NIFTY reported a new 14-day high but the RSI has not. The Daily MACD continues to remain above its signal line.
Having said this, again, as mentioned above, that at the cost of repetition, we continue to advice to refrain from taking any aggressive long positions. Whatever longs that are taken selectively, profits should continue to be vigilantly protected. The Markets are getting unhealthy which this kind of technical indicators and thus, correction remains imminent and overdue. The Markets will find some reason to correct in form of rising Brent Crude prices, uncertainty over Greece, reaction to advance GDP numbers set to be announced, fears of China slowdown on persistence of Europe Crisis, etc., etc., etc. However, the factors would certainly remain technical.
All and all, it is continued to be advised to work out the day with great degree of caution and refrain from aggressive positions. Very selective stock specific action would be seen, but overall, very cautious outlook is advised for the day.
Consulting Technical Analyst,
Monday, February 6, 2012
MARKET TREND FOR TODAY February 6, 2012
The Markets continued to rule in the artificial manner repeating its pattern of remaining trend less during the day and seeing as sharp up move towards the end of the session. The Markets continued to end the day with gains defying technical parameters on Friday too as it continued to surge dangerously on technical parameters. The Markets remained flat throughout the session, saw a sharp up move towards the end and ended the day at 5325.85, posting yet another gain of 55.95 points or 1.06%. With this, it has continued to form a higher top and higher bottom on the Daily High Low charts and ended the week with net gains of 121.15 points or 2.36%.
Today also, expect a positive opening in the Markets and expect the Markets to trade in positive at least in the initial trade. The technical indicators continue to caution against the unabated rally which has been in total defiance of the technicals and today, we might see positive opening and then some profit taking if the artificial behaviour of the Markets does not continue.
We have drawn attention of the Investors several times, but again we do it that the “typical” behaviour of the Markets of moving sidewards for most part of the session and then seeing a sudden spurt is nothing but structured behaviour of few big FIIs and thus, we see total defiance of technical indicators. On several occasions in the Markets, we have seen the retail small investors getting stuck at the higher prices when an imminent correction sets in.
Having said this, for today, the levels of 5400 is the immediate resistance on the Charts. The supports are expected quite down at 5255 and 5205.
The RSI—Relative Strength Index on the Daily Chart continues to remain in ”overbought” range at 73.6260. Though the NIFTY has made a 14-day high, the RSI has not and this is “Bearish Divergence”. The Daily MACD continues to trade above its signal line and is moving towards being ‘Overbought”. On the Weekly Charts, the RSI still shows strength but the levels of 5400 remains a pattern resistance.
All and all, the overall analysis remains more or less the same that we have since last couple of sessions. The Markets are rising, showing “Bearish Divergence” on the lead indicators. These lead indicator warns in advance of any impending corrections / reversals in advance. The Markets usually tend to follow these lead indicators. What we feel that once this liquidity stops to chase, we may see a equally sharp correction. The total stock futures have seen shedding of over 3.67 crore shares in Open Interest, which too is a cautionary sign. We continue to reiterate our advice to refrain from any blanket long position and fiercely protect any long position profit at higher levels and prefer to remain in Cash until we see a corrected trend.
Consulting Technical Analyst,