Friday, May 4, 2012
MARKET TREND FOR TODAY May 4, 2012
A weak Rupee took its toll on the Markets yesterday as the Markets opened lower, saw some further bout of weakness towards the end and finally ended the day with modest losses. The Markets opened on a lower note but remained in a capped range for the most part of the session. It was heading nowhere until in the late afternoon trade, it saw some more weakness creeping in and went on to give its day’s low of 5180.65. IT however recovered a bit to finally end the day at 5188.40, posting a net loss of 50.75 points or 0.97%. In the process it has formed a lower top and lower bottom on the Daily High Low Charts and the volumes traded yesterday remained below average.
Today’s session remain very critically important for the Markets as the Markets are expected to open on a moderately lower note and look for directions. As the lead indicators suggest, there are chances that the Markets open lower but better themselves as the day progresses as there is no structural breach on the Daily Charts.
For today, the levels of 5225 and 5260 are immediate resistance on the Charts and the levels of 5142 and 5119 are major supports in the form of 100 and 200 DMA respectively at Close.
The lead indicators suggests that the Markets are likely to resist to weakness as the weakness seen off late in last couple of sessions is due to external concerns and the factors are not technical. The RSI—Relative Strength Index on the Daily Chart is 44.0277 and it does not show any failure swing. The NIFTY has formed a new 14-day low but RSI has not and this is BULLISH DIVERGENCE.
Both NIFTY and Stock futures have went on to add Open Interest indicating existence and further creation of shorts in the system. Further, the Markets still trades ABOVE its major averages (100 and 200 DMA) and the positive crossover that these averages have reported has got more prominent. All this indicate that there is very little or down major downside in the Markets, speaking purely on technical grounds.
All and all, so far as today is concerned, as the F&O data suggests, as the lead indicators indicate and Pattern Analysis showing no negative breach on the Daily Charts, there are fair chances that the Markets improves after opening on a moderately lower level. It is very strongly advised to avoid shorts, maintain liquidity and hold to open positions. The shorts should be strictly avoided as due to no structural breach on the Charts, there are chances that one gets trapped at lower levels. Overall, cautious, but positive outlook is advised for today.
Consulting Technical Analyst,
Thursday, May 3, 2012
MARKET TREND FOR TODAY May 3, 2012
The Markets had a relatively dull session yesterday as it consolidated on Close Charts by ended the day with negligible losses after paring its opening gains. The Markets opened on a positive note and traded positive in the initial trade as it formed its day’s high of 5279.60 in the morning trade. It formed a negative trajectory thereafter as it slowly pared its gains as the session progressed. However, it traded completely flat until the last half hour of the trade. It dipped into the red in the end but recovered a bit from there again to finally end the day at 5239.15, posting a very negligible loss of 9 points or 0.17%. The volumes remained relatively lower on account of consolidation and it formed a higher top and higher bottom on the Daily High Low Charts.
Today’s analysis would remain more or less similar to that of yesterday as the Markets lacks any major triggers, technicals remain unchanged and the Markets continue to consolidate showing no directional bias on any side. Therefore, one would have to rely on overall pattern analysis as the Markets are likely to continue to consolidate. Expect the Markets to open on a flat to moderately negative note and look for directions and the intraday trajectory would continue to remain important.
The levels of 5270 and 5325 shall act as immediate resistance levels and the levels of 5190 and 5150 shall act as supports on the Charts.
RSI—Relative Strength Index on the Daily Chart is 48.6744 and it shows no negative divergence or failure swing and it is therefore, neutral. The Daily MACD continues to trade below its signal line.
The NIFTY Futures have shed a very nominal 1.20 lakh shares in Open Interest and the Stock Futures have added over 2.3 crore shares in Open Interest, indicating no directional bias, especially on the downside. The NIFTY PCR stands at 1.10 against 1.12.
Overall, with no directional bias seen, the Markets have limited downside but overall is likely to remain range bound and volatile with overall very capped movement at Close levels. It is continued to be advised to avoid aggressive positions and also refrain from shorts as there is no structural breach on the Charts. The NIFTY remains above the falling trend line shown in the Charts and with very low levels of overall open positions, the bias remains towards upside.
All and all, very selective and stock specific approach should be continued and profits be very vigilantly protected on the upside. A selective approach with positive bias is advised for today.
Consulting Technical Analyst,
Wednesday, May 2, 2012
MARKET TREND FOR TODAY May 2, 2012
The Markets saw a volatile session on Monday, saw some minor profit taking but finally ended the day with positive bias as it closed with modest gains. The Markets opened positive and remained positive throughout the session. The Markets opened on a positive note and went on to give intraday high of 5262.15 in the late morning trade. The Markets came off its highs in the afternoon trade as it saw some minor profit taking. The Markets recovered again in the later half to finally end the day at 5248.15 posting a net gain of 39.15 points or 0.75%. In the process, it has formed a higher top and higher bottom on the Daily High Low Charts.
For today, expect the Markets to open on a positive note and look for directions. The lead indicators, the F&O data and the pattern analysis all lead towards greater possibility of positivity sustaining in the Markets and the intraday trajectory would continue to remain important.
The levels of 5310 and 5335 shall act as immediate resistance on the Charts and the levels of 5210 and 5180 shall act as supports.
The RSI—Relative Strength Index on the Daily Chart is 49.5353 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD still continues to trade below its signal line.
The Markets have attempted to move up the falling trend line, as indicated in Charts and this may see some momentum coming in. It would be critical to see the Markets sustaining above the levels of 5200 in order to avoid any short term weakness. The positive crossovers of the DMAs have become distinct.
Both NIFTY and Stock futures have continued to add open interest. However, the Markets remains in a broad range and it is likely to remain until it moves past the levels of 5300 and 5400-5420 levels. Until this happens will have to live with range bound movements, minor profit taking bouts and overall volatile trade.
All and all, range bound trade to continue. With no structural breach on the charts of any kind, short should be avoided. At the same time, profits on existing positions, if any, should be protected vigilantly as the Markets will remain direction-wary. Aggressive positions may be avoided but stock specific action would be seen and selective buying may be done. Overall, positive caution is advised for today.
Consulting Technical Analyst,
Monday, April 30, 2012
MARKET TREND FOR TODAY April 30, 2012
The Markets had a quiet and positively biased short session on Saturday as it ended the day with modest gains. The Markets opened positive and traded positive in a capped range for the most part of the short trading session. However, towards the end, it moved up further to give the day’s high of 5216.40 and finally ended the day at 5209, posting a modest gain of 18.40 points or 0.35%. With this it has formed a similar top and higher bottom on the Daily High Low Charts. The Markets have ended the week with net loss of 81.85 points or 1.54%.
For today, expect the Markets to open on a mildly positive note and continue with its attempt of up move. The Markets may open and trade positive at least in the initial session however the intraday trajectory that it forms during the day would continue to be important as the Markets still continues to remain in overall range.
For today, the levels of 5245 and 5290 shall act as resistance and the levels of 5130 and 5125 shall be very important supports at Close levels.
The lead indicators throw a contradictory signals on Daily and Weekly Charts. The RSI—Relative Strength Index on the Daily Chart is 45.6526 and 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. On the Weekly Charts the RSI is 50.0578 and it has reached its lowest value in last 14-weeks which is bearish. Also, the RSI has give its 14-period low but NIFTY has not and this is Bearish Divergence.
Coming back to the Daily Charts, the lower DMA (100) has reported a Positive Crossover as it has cut a larger DMA (200) from below and this indicators upward momentum in the short term.
Given this contradictory reading on Daily and Weekly Charts and the Pattern Analysis on the Daily Charts, the Markets are expected to see sharp movement on either side this week. However, given the very low F&O Open Positions and Markets trading above its 100-200 DMA, the downside still appears limited until Markets breaches these levels on the downside.
All and all, the volatility and the capped trade in the Markets cannot be ruled out. As we had mentioned in one of our previous editions of the Daily Market Trend Guide, the Markets have not given directional signals on either side and this will keep it in a broad range and volatile without going in any direction with conviction. It is advised to refrain from shorts and avoid aggressive positions. Also it is strongly recommended to keep protecting profits very vigilantly at higher levels. Overall, cautious outlook is advised for the day.
Consulting Technical Analyst,