Friday, April 27, 2012
MARKET TREND FOR TODAY April 27, 2012
The April Series ended on a very muted note as the Markets spent the entire session in a extremely narrow band of 20-odd points and ended the day with moderate losses. The Markets opened on a mildly positive note and gave its intraday high of 5215.60 in the very early session of the trade. It slipped into the red after briefly trading positive and thereafter spent most of the session in a very narrow range. It slipped a bit towards the end to form day’s low of 5179.05 but finally ended the day at 5189, posting a moderate loss of 13 points or 0.25%. In the process, it has formed a lower top but higher bottom on the Daily High Low Charts.
Today, expect the Markets to open on a flat to moderately positive note and look for directions. Given flat opening expected, the intraday trajectory would be critically important as the Markets hovers around two most critical support levels.
For today, the levels of 5254 and 5280 are immediate resistance levels on the Charts, and the levels of 5128 and 5130 are important support levels in the form of 100DMA and 200DMA respective at Close levels.
The RSI—Relative Strength Index on the Daily Chart is 43.6062 and it has reached its lowest value in last 14-days which is bearish. However, it shows no negative divergence. The MACD on the Daily Charts to continues to trade below its signal line. On the Weekly Charts too, the RSI, at 49.3832 is bearish as it has give its 14-week low, but shows no negative divergence. The Weekly MACD remains bullish as it trades above its signal line.
Given this, it is very important to note that the overall Open Positions at the beginning of this series is one of its all time lows as it has started very light and low. Within these very less overall open positions here are majority of shorts which have been rolled over as the NIFTY has added over 33 lakh shares in Open Interest.
Further to this, if we go with Pattern Analysis along with the above statistical reading, the lower DMA is in the process of giving a positive crossover but cutting the larger DMA from below, as evident from the Charts. Further to this, two important supports in the form of 100 DMA and 200 DMA exists in very near range. Given all this ,the Markets shows a very limited down side.
All and all, range bound trade and the consolidation will continue. We may continue to see a range bound and as a result volatile trade but given the very low base of open positions, sharp movement on the either side cannot ruled out but the bias remains positive due to reasons enumerated above. IT is strongly advised to refrain from aggressive positions until the Markets gets directional momentum and also to avoid shorts. Any weakness may be utilized to make selective purchases. On the other hand, profits should continued to be protected. Overall, cautiously positive outlook is advised for today.
Consulting Technical Analyst,
Tuesday, April 24, 2012
MARKET TREND FOR TODAY April 24, 2012
An exit by a hedge fund – Macquarie Asia Alpha Fund, send the otherwise dull session into a disappointing one as the Markets saw a steep cut to end the day with significant losses and the loss got aggravated by fresh European woes as the Markets also saw high addition of short positions. The Markets opened on a moderately positive note and traded briefly into the green as it saw a intraday high of 5310.55 in the early part of the trade. The Markets then gradually drifted into the red and then transformed itself into negative falling trajectory. It saw sustained drift in the valuations as it went on to give the intraday low of 5187.15. It finally ended the day at 5200.60 posting a cut of 90.25 points or 1.71%. It formed a lower top and lower bottom on the Daily High Low charts.
Today’s session remains a important session for the Markets. It is very important to note that despite yesterday paring of NIFTY, there is still no negative breach on the Charts and the Markets remain in a broad range. Secondly, the fall yesterday has been due to external non-technical reasons and this has also seen addition of huge short positions in the Markets. We are all likely to see stability returning to the Markets and expect the Markets to open on a decently positive note and look for directions with the intraday trajectory remaining very important.
For today, the levels of 5245 and 5300 shall act as resistance and the levels of 5136 shall remain all important support levels at Close in form of 200-DMA.
All lead indicators still continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 44.1956 and it has reached its lowest value in last 14-day which is bearish but it does not show any negative divergence. The Daily MACD is bullish as it still continues to trade above its signal line.
It is very important to note that the NIFTY futures which was trading at 20-point premium in the beginning of the session has gone into discount of 20-points and this signifies creation of huge short positions in the system. Further, if Pattern Analysis is done, the Markets have NOT shown any negative breach and trades well within the range above critical support levels.
It is important to keep our head in place when the Markets gets governed by non-technical factors and sees such volatile movements. We are in expiry week and will continue to see sessions dominated with rollover centric activities.
All and all, with no breach on the Charts, it is very strongly advised to hold on to all positions and maintain liquidity. It is also strongly advised to avoid shorts as there are chances of short traps occurring and one getting trapped in shorts at lower levels. With no negative breach on the Charts, the Markets will continue to remain in a range and bit volatile during this expiry sessions. Overall, while avoiding aggressive positions, cautiously positive outlook is advised for today.
Consulting Technical Analyst,
Monday, April 23, 2012
MARKET TREND FOR TODAY April 23, 2012
The Markets got a taste of Algorithmic trading caused by punching errors once again as the Markets saw a vertical fall in just few seconds of 80-odd points on Friday and then recovered half of it to end the four-day gaining streak to end the day with modest losses. The Markets opened on a flat to mildly moderate note on Friday and spent almost ¾th of its session in a very capped and narrow range. Suddenly a freak trade in Infosys and NIFTY caused a sudden and severe drop in NIFTY and NIFTY Futures and this was aggravated by the triggering of fed stoplosses in the system as the Markets went on to give day’s low of 5245.45. The Markets however recovered half of it to finally end the day at 5290.85, posting a modest loss of 41.55 points or 0.78%. It has formed a similar top and lower low on the Daily High Low Charts and has ended the Week with net gains of 83.40 points or 1.60.
The Daily and Weekly technicals of the Markets point towards continuation of consolidation and range bound movements with a positive bias. For today, the Markets are likely to open on a flat to mildly negative note and look for directions with the intraday trajectory continuing to remain important. The levels of 5340 and 5420 are immediate resistance levels on the charts and the levels of 5245 and 5210 are immediate supports.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Charts is 50.7261 and it shows no negative divergence or failure swings and is neutral. The Daily MACD remains bullish as it continues to trade above its signal line. The Weekly RSI at 53.0221 too is neutral as it shows no negative divergence or failure swings and the Weekly MACD too remains bullish as it trades above its signal line.
The NIFTY Futures Open Interest remains almost unchanged and the stock futures continue to add Open Interest. We have expiry week from today and the sessions are likely to remain dominated with expiry centric activities.
Having said this, all technicals on both Weekly and Daily Charts remain in place. They point towards no major reason for breakdown and also, as mentioned in previous editions of Daily Market Trend Guide, there is no breakout on the upside either and thus the Markets are all set to remain in a range, and thus volatile. Any sustainable upside shall occur above 5400-5420 levels and until then range bound movement is expected.
All and all, with the range bound movement expected, it is advised to refrain from shorts and aggressive positions on either side. Extremely selective stock specific approach is advised but selective buying is advised as overall bias remains on the upside. Overall, positive caution is advised for today.
Consulting Technical Analyst,