Friday, April 20, 2012
MARKET TREND FOR TODAY April 20, 2012
Positive consolidation continued in the Markets yesterday as the Markets ended 4th day in a row with gains as it ended the day with moderate gains. The Markets opened mildly positive and after trading in a range, it dipped into the red to give intraday low of 5291.30. However, it recover from its lows to trade into the green as it formed a rising trajectory for itself. It again pared some of its gains but later recovered again to give the day’s high of 5342.35. It finally ended a range bound day at 5332.40 with posting moderate gains of 32.40 points or 0.61%. With this, it has form a Parallel Bar with the almost similar top and bottom on the Daily High Low Charts.
Today, again, expect the consolidation to continue in the Markets with the Markets expected to open on a lower note and then trade with possibilities to recover given the technicals, the Pattern Analysis and the F&O data. All point towards a consolidation, narrow and range bound movement with an upward bias today.
For today, the levels of 5368 and 5420 shall act as resistance and the levels of 5305 and 5260 are immediate supports on the Charts.
The RSI—Relative Strength Index on the Daily Chart is 54.1464 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD remains bullish as it trades above its signal line.
The levels of 50-DMA, which is 5337 today, has continue to act as resistance at Close. It would be imperative for the Markets to move past this levels after which it can encounter resistance around 5400-5420 levels. However, again, NIFTY Futures have added over 10 lakh shares in Open Interest and Stock Futures have added over 6 Crore shares in the Open Interest indicating slow, but steady build up of long positions. Also, the Pattern Analysis point towards immediate short term strength on the Charts with the smaller DMA rising to cut the larger DMA from below, indicating to give a positive crossover in next few sessions to come.
All and all, no indications as yet for a breakdown on Charts and no upward breakout as yet too..!! So, stock specific action to continue and any dip should be used to make very selective purchases and at the same time, profits should be vigilantly protected as it is being done this entire week. Overall, range bound movement with positive bias is expected for today. Cautiously positive outlook advised.
Consulting Technical Analyst,
Thursday, April 19, 2012
MARKET TREND FOR TODAY April 19, 2012
The Markets consolidated yesterday after Tuesday’s up move as it pared some of its gains after a positive opening and finally ended the day with moderate gains. The Markets opened positive following positive global cues, but gave its intraday high of 5342 in the morning trade itself. After opening positive, the Markets saw some low volume profit taking as it drifted and remained in slightly falling trajectory. It basically found resistance at the 50-DMA and after drifting for the entire session, bit by bit on low volumes, it finally ended the day at 5300, posting a minor gain of 10.30 points or 0.19%. In the process, it has formed a higher top and higher bottom on the Daily High Low Chart. At Close, the 50-DMA which is 5338 today, has acted as resistance.
Today, consolidation is expected to continue as the Markets are likely to open on flat to moderately positive note and look for directions. The intraday trajectory would be critically important, all lead indicators and F&O data point towards underlying trend remaining intact.
For today, the levels of 5338 and 5380 shall act as immediate resistance on the Charts and the levels of 5278 and 5240 shall act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 51.7928 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD, however, has reported a positive crossover and it now trades above its signal line and it is bullish.
The NIFTY Futures have added nearly 8 lakh shares in Open Interest and Stock Futures have added little over 3 crore shares in Open Interest. Nifty PCR stands at 1.12 with significant room on the upside.
Having said this, it is important to note that as we have been explaining in our previous editions, there is no breakout or breakdown on charts and the Markets continues to remain in a consolidation mode due to the reasons mentioned above. So, the conclusion is that the Markets do have a positive bias but has a statistical resistance at 5338 in form of 50-DMA and further in the range of 5400-5420 levels. So, until the Markets moves past these levels, we will keep seeing movements like that of yesterday due to profit taking activities, but still keeping the underlying trend intact.
All and all, it is advised to continue to remain stock specific while avoiding aggressive positions. Short should clearly be avoided. Any weakness should be used for selective stock picking, while continuing to protect profits at higher levels. Overall, cautiously positive approach is advised for today.
Consulting Technical Analyst,
Wednesday, April 18, 2012
MARKET TREND FOR TODAY April 18, 2012
The Markets rejoiced a 50-bps cut in the REPO Rate, first time since three years as it ended the day with decent gains after greatly volatile session and with the NIFTY moving over 150-points intraday as the session remained greatly volatile. The Markets opened flat to moderately negative and traded in capped range until the RBI made announcements following which it saw a sharp increase of 60-odd points. It however slowly pared those gains again to trade flat. It saw recovery again and went on to give its intraday high of 5298.30 and ended the day at 5289.70, posting a decent gain of 63.50 points or 1.22%. In the process, it has formed a sharply higher top and higher bottom on the Daily High Low Charts.
Since the Markets have ended the day near the high point of the day, technically speaking, they are expected to open higher and continue with their up move. Today, we can fairly expect the Markets to open on a positive note and look directions. The intraday trajectory would continue to remain important.
For today, the levels of 5315, which is the pattern resistance as denoted by blue falling trend line and the levels of 5338 which is the 50-DMA for the Markets and the levels of 5400 shall act as immediate resistance on the Charts and the levels of 5250 and 5210 shall act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 51.0511 and is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to trade below its signal line.
All F&O data point towards continuation of upward move. The NIFTY futures have added over 10 lakh shares and the Stock Futures have added over 6 Crore shares in Open Interest indicating creation of fresh long positions.
All and all, the underlying trend remains intact. However, the way there had been no negative breach on the Charts couple of days back, similarly, there is no positive breakout as yet. Following this, the Markets faces multiple resistance until it moves past 5400-5420 levels and until this happens , all profits should be protected vigilantly. Stock specific purchases may be made as selective picking would continue but at the same time, vigilant profit booking should also not be ignores until the Markets moves past the mentioned levels. Overall, positive outlook is advised for today as underlying trend remains intact.
Consulting Technical Analyst,
Tuesday, April 17, 2012
MARKET TREND FOR TODAY April 17, 2012
The Markets had a positive consolidation yesterday ahead of Monetary Policy today as it consolidated on lower volumes in a range bound session and closed with moderate gains. The Markets opened on a mildly lower note yesterday but gave its intraday low of 5183.50 in the early minutes of the trade. It recovered in the morning trade to trade flat and in a capped range. It gained few more points but suddenly pared all of those gains to trade negative in the afternoon trade. However, the final leg of the session saw sharp recovery again. It recovered all of its losses, went back into the green, gave its intraday high of 5233.50 and finally ended the day at 5226.20, posting a modest gain of 18.75 points or 0.36%. It the process, it has formed a lower top and almost similar bottom on the Daily High Low Charts.
Today’s analysis would be more or less similar that of yesterday as the Markets are likely to open on a lower note and look for directions. Today’s trend would be heavily affected by the RBI’s Monetary Policy announcements and this will certainly keep the Markets volatile.
For today, the levels of 5265 and 5295 are immediate resistance and the levels of 5180 and 5144 in the form of 200-DMA are the major supports on the Charts.
The RSI—Relative Strength Index on the Daily Chart is 46.3234 and it continues to remain neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.
Having said this, there has been large amount of media hype surrounded around RBI’s Monetary policy and the hope for CRR rate cut have diminished following Macro Economic Report of the RBI. However, there are still wide expectations for a 25 bps Repo Rate Cut.
It is important to note that a token rate hike / rate cut does no good or bad to a economy which has some more serious ailments. Besides the media hype around rate cuts, FIIs and Foreign Investors look more at a “trending” Macro Economic Factors have always taken a decision based on more serious factors and that too over a long term.
NIFTY Futures have added nominal Open Interest and so do have Stock futures. If this is read with the above, it also becomes important to note that the Markets continues to consolidate without any negative breach on the Charts. The volatility that we are going to see today would be a day specific issue and there will not be a negative breach on the Charts until the Markets moves and closes below its 200-DMA and its filter.
All and all, volatile session ahead. It is advised to refrain from any aggressive positions and the profits should be vigilantly protected. Shorts should be avoided until the Markets breaches 200-DMA levels. Stock specific actions would be seen and any downside should be used for making selective purchases. Positive caution is advised for today.
Consulting Technical Analyst,