Friday, March 16, 2012
MARKET TREND FOR TODAY March 16, 2012
The Markets spent yesterday’s session with great cautionary stand before the Budget and despite favourable technicals, drifted lower in the entire session to end the day with loses. The Markets opened negative and remained negative in a downward falling trajectory for the entire session. It kept drifting lower during entire day and went on to give intraday low of 5362.30. It ended the day at 5380.50 after recovering a bit but still posted a loss of 83.40 points or 1.53%. The Markets reacted negatively after the RBI did not cut rates but that was anyway expected. In the process, it has formed a lower top and lower bottom on the Daily High Low charts.
For today, expect the Markets to open on a positive note and look for directions. The levels of 5450 and 5490 shall act as immediate resistance today and the levels of 5350 and 5320 shall act as supports.
The RSI—Relative Strength Index on the Daily Chart is 53.4057 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line, again remaining on the verge of giving a positive crossover.
The Markets will react today in a manner typical on the Budget day. Yesterday, the Markets have come down despite favourable technical. There was a positive swing on the lead indicator and a positive crossover of the short term averages which is a bullish sign for the Markets. But the Markets reacted after the RBI not cutting rates. But it is important to note that the RBI Accouchements were actually a non-event as it was anyway expected that post the CRR cut of 75 BPS, the rates won’t be slashed further. Thus, the Markets had no reason to react in the manner it did yesterday.
Having said this, for today, the Markets shall open moderately positive but trade in a range until the Budget speech starts. Then it will start reacting to the announcements. The session will remain certainly volatile but any reactions would again typically remain knee-jerk reactions and actually market reaction shall start coming in from next week. However, if nothing significantly negative comes out, the bias remains on the upside.
Also, yesterday’s fall has come while adding significant Open Interest in NIFTY and other stocks which implies creation of shorts in the system. Thus, there are all chances that we see stability in the Markets coming in once the knee-jerk reactions are over. So even if the Markets have momentarily dipped little below its important supports, it is likely to move past them again.
All and all, volatile session ahead, but unless anything significantly negative comes in the Budget, the bias remain with the uptrend remaining intact. However, it is advised to refrain from aggressive positions until the fine prints of the Budget gets clear. Overall, cautiously positive approach is advised for today.
Consulting Technical Analyst,
Thursday, March 15, 2012
MARKET TREND FOR TODAY March 15, 2012
The Markets consolidated its gains yesterday as it prepared for two volatile sessions, today reacting to credit policy and tomorrow to the union budget. The Markets opened stronger and gave its intraday high of 5499.40 in the very early minutes of the trade. It however, remained in downward trajectory as it pared most of its gains in the first half of the session. The Markets, however, recovered a bit and still managed to end the day at 5463.90, posting a decently moderate gain of 34.40 points or 0.63%. It has continued to form a higher top and higher bottom on the Daily High Low charts.
Today, it is going to be a extremely important session for the Markets. The technical indicators point towards continuing upward bias and the Markets have two events, the Credit Policy and the Union Budget on two successive days to react to. The intraday trajectory would be important and the volatility is bound to stay.
For today, expect the Markets to open on a flat to mildly negative note. The Markets are expected to remain in a capped range until the Credit Policy is announced and shall react to it afterwards. For today, the levels of 5500 and 5535 are immediate resistance on the Charts and the levels of 5425 and 5400 are immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 60.3029 and it has reached its highest value in last 14-days which is bullish. The Daily MACD trades below its signal line but it is on verge of a positive crossover.
Having said this, it is important to note the following. The further indications on the Charts too are pointing towards continuance of uptrend. The 50-DMA has cut the 200-DMA from the above which is a positive crossover and a clear indication of short term bullish trend. Therefore, so long as the Markets stays above the levels of 5400-5425 support zone, there are no reasons for any weakness, unless there is specifically negative in the Budget.
Further, most of the Markets have discounted the fact that RBI may not cut rates today. So, the chances of negative on this front are less as this is widely discounted in the Markets, but slightest positive or a minor rate cut will give further impetus to the Markets.
The only non-technical factor that can slightly dampen the spirit is the resignation of the Railway Minister today. This, individually many not that great a affecting factor, but it is indication of how the UPA government is virtually bullied by its non-performing allies who are posing the real threat and are the actually the reason behind the policy paralysis that the UPA Government is suffering from. They are expected to pose serious roadblocks even if the Government tries to take “economically correct” measures in the coming Budget.
All and all, over all bias remains on the upside. It is advised to make purchases selectively and strictly refrain from fresh shorts and also protect profits at higher levels. Overall, positive caution is advised for today.
Consulting Technical Analyst,
Wednesday, March 14, 2012
MARKET TREND FOR TODAY March 14, 2012
The Markets saw session with gains yesterday as the Markets opened above its resistance levels after a gap up opening, remained there for the entire session and ended the day with decent gains. The Markets opened strong on positive cues but spent the entire session a 20-odd point range as it gave its intraday high of 5438.65. The Markets never really showed any intraday movement and ended the day at 5429.50, posting a decent gain of 69.95 points or 1.31%. In the process, it has formed a higher top and higher bottom on the Daily High Low Charts.
For today, expect a gap up and strong opening in the Markets again. The Markets are expected to open strong and trade positive at least in the initial trade. The intraday trajectory would be important to see if the Markets sustains its opening gains as during the last two sessions, there have been no intraday movement on the charts.
For today, the levels of 5460 and 5510 shall act as resistance and the levels of 5420 and 5365 are the supports on the Charts.
The RSI—Relative Strength Index on the Daily Chart is 58.2371 and it shows no negative divergence or failure swing and is therefore neutral. The Daily MACD continues to remain bearish as it still trades below its signal line.
Having said this, it is important to note that on Monday, the Markets pared all of its opening gains immediately post opening and then traded in a extremely narrow range for the entire session. On the opposite, yesterday the Markets opened up and spent the entire session with virtually no intraday movement at all. This has obviously resulted into very moderate volumes. This also further signifies that the Markets did saw buying before the budget but the retain participation has remained at minimum levels.
Today, Railway Budget would be announced but that is expected to remain a non-event.
Overall, since the Markets have managed to end the day above 5400 and is likely to open above 5420 levels, which have been its resistance zone, the overall bias remains bullish, at least on the Charts. However, the Markets shall react in very volatile manner to the Monetary Policy tomorrow and the Budget on Friday.
All and all, though the bias remains on the upside, heavy volatility shall remain in coming two sessions. Also, until today, there has been virtually no intraday movement except the opening gain or loss and this has certainly kept the retail participation and thereby volumes away from the Markets. It is advised to make selective purchases and keep protecting profits at higher levels. However, aggressive positions may still be awaited. Positive caution is advised for today.
Consulting Technical Analyst,
Tuesday, March 13, 2012
MARKET TREND FOR TODAY March 13, 2012
The Markets had a little disappointing session yesterday as it failed to sustain its opening gains as closed the day with relatively small gains as compared to its opening. The Markets almost saw a gap up opening and gave its intraday high of 5421.90 in the early seconds of the trade. The Markets, however, saw itself in falling trajectory immediately. It pared all of its gains in the morning trade and momentarily slipped into the red as it gave its day’s low of 5327.30, coming off almost over 90-odd points from its day’s high. Though, it recovered a bit again and finally ended the day at 5359.55, posting a net gain of 26 points or 0.49%. It has formed a higher top and higher bottom on the Daily High Low charts.
Today would be a important session for the Markets. As evident from the above chart, the way the 200 and 100DMA have held as support so far, so has the levels of 5400-5420 held as immediately resistance. Yesterday also, the Markets resisted and came off from those levels.
Today, expect the Markets to open positive, but again near its crucial resistance zone and it would be critically important to see the behaviour of the Markets vis-à-vis the levels of 5400-5420 range as that would decide the trend for the day. Thus, the intraday trajectory that the Markets form would be all the more important.
The Markets have been volatile in past sessions as it awaits to react to the rest of the two important events, the Monetary Policy and the Union Budget.
The RSI—Relative Strength Index on the Daily Chart is 53.5864 and is neutral as it shows no negative divergence or failure swings. The Daily MACD is bearish as it continues to trade below its signal line.
Having said this, it is important to note that so far, the range of 5400-5420 have held out as immediate resistance and shall continue to do so until the Markets breaches the levels on the upside. Thus, post opening near those levels, it would be important for the Markets to capitalize on that possible strong opening and move past those levels. Until that happens, there are chances that Markets comes off after opening positive and remains in the broad range of 5060-5420 levels. In the process, it can remain very volatile.
Overall, it is advised to approach the Markets with good amount of caution. There is no breakout on the upside as yet, and also there is no downward breach on the Charts too. The Markets are in are in a broad range and thus high degree of volatility may remain in the entire week. Aggressive purchases may be avoided and buying should remain highly stock specific with vigilant protection of profits at higher levels. Overall, continuance of cautious approach is advised for today.
Consulting Technical Analyst,