Friday, March 23, 2012
MARKET TREND FOR TODAY March 23, 2012
The Markets had a very disappointing session yesterday after it saw a very rapid selloff in the last hour and half of trade as the Markets went on to end the day with steep losses. The Markets opened moderately lower on expected lines but after briefly trading in the red, moved into positive territory and gave its intraday high of 5385.95. The Markets traded in a capped range after coming off from its highs, but in the last hour and half of trade, it saw a across the board sell-off as it saw a steep fall taking the Markets to intraday low of 5205.65. This was attributed to the coal scam (though CAG has denied the reports), weak PMI data and the rollback of rail fares once again bringing to the focus the Government’s inability to pursue any reforms and its weakness in handling its allies. All this contributed to the bad sentiment. The Markets ended the day at 5228.45, posting a deep cut of 136.50 points or 2.54%. The volumes remained high at 2.28 lakh crores and the Markets have formed a higher top but lower bottom on the Daily High Low charts.
For today, we can expect some stability to return in the Markets. Though the Markets came off in a rapid manner yesterday, it is still trading above one of its major supports, i.e. its 200-DMA. We can expect the Markets to open on a flat to moderately positive note and look for directions.
For today, the levels of 5290 and 5350 shall act as immediate resistance and the support is expected to come in at 5157 which is the 200-DMA of the Markets.
The RSI—Relative Strength Index on the Daily Charts is 44.0982 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 there has been lot of panic element in the Markets yesterday but still, there has been no structural breach on the Charts. The Markets still can remain fairly in the broad trading band it has established for itself. Though some stability is expected, even if the Markets remain and get bit weaker, it is largely expected to take support near / at its 200-DMA which is is 1% range.
All and all, with no structural breach seen on the Charts, the downside in the Markets remain limited at these levels. Shorts should be refrained from and selective purchases can be made using this downside as an opportunity to enter in certain stocks. However, profits still needs to be vigilantly protected. Overall, cautious, but mildly positive approach is advised for today.
Consulting Technical Analyst,
Thursday, March 22, 2012
MARKET TREND FOR TODAY March 22, 2012
The Markets had a very smart pullback rally yesterday after almost a week of weakness and consolidation as it ended the day with smart gains after spending initial period in some weakness. The Markets opened on a moderately negative note and gave intraday low of 5256 in the morning session. The Markets traded negative for a brief period in the morning session but it transformed itself into positive upward rising trajectory. It remained in this formation throughout the session and went on to give intraday high of 5372.35. It hovered around those levels and finally ended the day near the high point of the day at 5364.95, posting a robust gain of 90.10 points or 1.71%. In the process, it has formed a sharply higher top and higher bottom on the Daily High Low Charts.
Technically speaking, since the Markets have ended the day near the high point of the day, they are expected to open positive and continue with their up move, at least in the initial trade. However, for today, we can expect a flat to mildly positive opening and Markets shall look for directions thereafter. The chances are that the Markets continues with the up move or consolidates with positive bias.
For today, the levels of the upper range of trading band – 5400-5430 shall continue to act as resistance. The Markets will have to move past those levels in order to reverse the trend and continue for a major up move.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 52.7262 and is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to remain bearish as it trades below its signal line.
The F&O statistics remain similar to that of yesterday with NIFTY futures shedding some Opening Interest while stock futures adding the Open Interest, and this continues to signify the fresh built up of longs in stocks while some minor unwinding in NIFTY futures.
As mentioned above, the levels of upper range of the trading band, i.e. 5400-5430 will continue to pose a major resistance. The behaviour of the Markets around those levels would be critically important for a fresh sustainable up move. Until the Markets moves past those levels, we may see the Markets again continue to consolidate.
All and all, the bias remain on the upside, but the Markets need to move past the levels mentioned above and until this happens, it is advised to maintain stock specific view and all longs should be very selective while protecting profits with equal amount of vigilance. Shorts should be avoided. Overall, positive outlook is advised for today.
Consulting Technical Analyst,
Wednesday, March 21, 2012
MARKET TREND FOR TODAY March 21, 2012
The Markets took an expected breather after three days of decline as it spent an volatile session on expected lines and ended the day with mild gains. The Markets opened on a moderately positive note and gave its intraday high of 5297.35 in the morning trade. However, the Markets pared all of its gains in the first half of the session. It went into negative to give its intraday low of 5233.35. However, the final leg of the session saw recovery again from its lows and Markets not only traded in the green but went almost near their day’s high. It however ended the day at 5274.85, posting a moderate gain of 17.80 points or 0.34%. It has continued to form lower top and lower bottom on the Daily High Low Charts.
Today’s analysis remains more or less similar to that of yesterday. Today also, we can expect the Markets to open on a moderately positive note and look for directions. The intraday trajectory would continue to remain critical to decide the trend for the day. There has been no breach on the Charts and the Markets continues to trade near their support and are expected to remain range bound if volumes fail to cheer.
For today, the levels of 5300 and 5345 shall act as immediate resistance and the 50-DMA levels of 5252 an the 200-DMA levels of 5159 are immediate support on the Charts.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 46.2846 and is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.
There has been some contradiction seen in the F&O data. The NIFTY futures have shed some 3.30 lakh shares in Open Interest while most of the Stock futures have seen additions in the Open Interest. One of the readings from this is that some fresh longs have been created in the stock futures with some unwinding in the NIFTY. However, the Markets continue to hold support of its 50-DMA until now and any breach of this level may take it to test its 200-DMA which is one of its major support.
All and all, the overall consolidation in the Markets is likely to continue. The Markets are expected to trade in a range and during this course, may remain range bound and also volatile. Stock specific activity will continue to be seen. Longs should be taken very selectively, while protecting profits at higher levels while shorts should be avoided as there is no negative breach on the Charts as of now. Overall, like yesterday, positive caution is advised for today.
Consulting Technical Analyst,
Tuesday, March 20, 2012
MARKET TREND FOR TODAY March 20, 2012
The short week began (Friday being a trading holiday) with the Markets continuing to slide on the third consecutive day as it once again ended the day with losses. The Markets opened on a negative note and never really showed strength as it recovered to trade in positive for a very brief period in the morning trade. Thereafter, it formed a negative downward falling trajectory and went on to remain in this formation for the rest of the session. It went on to give the intraday low of 5238.55 after recovering a bit and ending the day at 5257.05, posting a net loss of 60.85 points or 1.14%. In the process, it has continued to form a lower top and lower bottom on the Daily High Low Charts.
The Markets are expected to open on a flat note today and look for directions. The intraday trajectory would be critically important for the Markets and shall remain important enough to decide the trend for the day. The levels of 5325 and 5360 are immediate resistance on the charts and the levels of 5240 and 5161 are expected to act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 44.9074 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.
Having said this, it is important to note that the Markets are poised at a critical juncture. As evident from the Chart above, the Markets have made a lower top and has not held the 5400-5420 levels of support zone, as of now. On the other hand, yesterday’s close has taken support at its 50-DMA of 5241 levels. IF the Markets hold this support then it has immediate resistance as mentioned above and the levels of 5400-5420 shall act as immediate top. If the Markets g et weaker, the next immediate major support would be the 200-DMA of the Markets at 5161.
The overall volumes have been hovering around its average, and overall, the Markets have been consolidating and are expected to do so in coming sessions. The NIFTY and major stock futures have overall added open interest and some significant amount of shorts have been seen. The lower volumes have been a minor positive for the markets in times of consolidation.
All and all, the range bound movement in the Markets is expected to continue. With the NIFTY PCR of 1.06, even if there is weakness on the Charts, it is likely to be brief and the Markets may find important support in next 1% range. It is advised to refrain from any fresh shorts and any longs should be taken very selectively as stock specific action shall continue. Overall, some stability is expected and positive caution is advised for today.
Consulting Technical Analyst,