Friday, June 8, 2012
MARKET TREND FOR TODAY June 8, 2012
Though with an intra-session reluctance, the Markets continue it up move for the fourth day in a row as it ended the day with extended gains. The Markets opened modestly positive and after trading with capped gains, pared most of its gains and at one moment traded modestly positive. It corrected itself intraday from the minor double top resistance but thereafter saw the recovery again in the second half of the session and went on to give its day’s high of 5059.65, just a few points from its 200-DMA, the level which it was expected to resist. It ended the day at 5049.65, posting a net gain of 52.55 points or 1.05%. It formed a higher top and higher bottom on the Daily High Low Charts.
The Markets are expected to open moderately lower and consolidate a bit after rising over 275 points from the day’s low on 4th June, and it would not be a surprise if we see minor retracement. Further, the Markets have resisted precisely to the 200-DMA and there are chances that the Markets consolidates briefly around this level.
The levels of 5065 which is the 200-DMA and the level of 5092, which is the 50-DMA are likely to act as immediate resistance at Close levels. The levels of 5010 and 4965 are immediate supports on the Charts.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 56.0557 and it has reached its highest value in last 14-days, which is bullish. It does not show any negative or positive divergence. The Daily MACD continues to trade above its signal line and is bullish.
Having said this, the chances of the Markets consolidating or showing minor retracements cannot be ruled out. There are chances that the Markets consolidates again with the levels of 5065 and 5092 acting as resistance and thus, we may see some range bound movements and also a tinge of volatility returning to the Markets. It is important to note that these levels should be used for protecting profits but certainly not the opportunity for fresh shorts.
All and all, range bound session likely and some volatility is likely to be seen. Chances of consolidation are seen in the Markets and any downside should be utilized to make very selective purchases. Intermittent profit taking bouts cannot be ruled out. Existing profits should be protected at higher levels. Overall, cautious optimism is advised for today.
Consulting Technical Analyst,
Thursday, June 7, 2012
MARKET TREND FOR TODAY June 7, 2012
The Markets had a thoroughly delightful session which was attributed to rate cut hopes on June 18th as well as meeting of the PM with key officials but it was thoroughly supported by technicals as well. The Markets, though it continue to remain in the broad range mentioned by us in our yesterday’s edition but ended with robust gains. The Markets opened on a positive note and continued to trade with capped gains. Thereafter, in the second half of the session, the Markets strengthened further as it went on to give the day’s high of 5010.45. It finally ended the day near the high point of the day at 4997.10, posting a robust gain of 133.80 points or 2.75%. It has formed a sharply higher top and higher bottom on the Daily High Low charts with greater volumes.
The Markets have closed yesterday near the high point of the day and so technically speaking, they are expected to continue with their up move, at least in the initial session. Having said this, with global cues highly supportive, we are expected to see yet another gap up opening today and the Markets are expected to open between its 200-DMA and 50-DMA.
For today, the levels of 5064 (200 DMA) and 5096 (50 DMA) are immediate resistance on the Charts and the supports are likely at 4950 and 4925 levels.
The RSI—Relative Strength Index on the Daily Chart is 51.9313 and it has reached its highest value in last 14-days which is bullish. It does not show any negative or positive divergence.
Having said this, it is slightly important to note that the NIFTY has shed nominal Open Interest of 18,000 shares. This signifies a slight booking of profits at higher levels. The Stock futures have went on to add net open interest.
All and all, the opening of the Markets is likely to be above its 200-DMA and it would be critical to see the behavior of the Markets around those levels because, even with the yesterday’s rise, we are still within the broad range defined in our yesterday’s edition. So, intraday trajectory would be important and it is advised to use this perfect pullback to protect profits on existing positions as minor profit taking or consolidation cannot be ruled out. Fresh purchases may be made selectively. Positive outlook is advised for today.
Consulting Technical Analyst,
Wednesday, June 6, 2012
MARKET TREND FOR TODAY June 6, 2012
Volatility refused to go away as the Markets enjoyed a positive start but failed to sustain its opening gains as it ended the day with minor gains. The Markets opened on a positive note and gradually remained in rising trajectory as it gave its intraday high of 4898.95 in the afternoon trade. The volatility returned to the Markets as the Markets pared all of its gains and virtually traded flat. It however recovered a little to finally end the day at 4863.30, posting a minor gain of 15.15 points or 0.31%. The volumes remained little below average and the Markets formed a higher top and higher bottom on the Daily High Low Charts.
Expect the opening in the Markets today to be on a positive note and but the that would cause the Markets to open around yesterday’s high levels and thus it would be important for the Markets to remain in positive trajectory and maintain / capitalize on the opening gains.
The levels of 4895 and 4930 are immediate resistance on the Charts and the levels of 4830 and 4805 are immediate supports.
The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 38.2228 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade above its signal line and is therefore bullish.
Having said this, it is important to note that the Markets have so far held on to the potential bottom formation at 4788 levels of May 18th and have attempted to rebound and take support at a double bottom formation couple of days back. So, the Markets have apparently taken support and have held on to the bottom, but at the same time have also not broken out of a range. The Markets have been trading in a broad range of 4788 on the lower level and 5020 on the upside. This broad range will have to be breached on the upside if this potential bottom formation is to be confirmed.
So, given this reading, and with the NIFTY and Stock futures both addition Open Interest and with the discount in NIFTY Futures widening a bit, it can be fairly assumed that so far this bottom is likely to be maintained, but at the same time, the Markets are likely to remain in a capped range and this shall keep the Markets volatile and intermittent bouts of profit taking cannot be ruled out.
Given this, it is advised to continue to maintain a strict vigil on the open positions and protection of profits at higher levels is advised. Purchases may be made but that should remain highly selective and stock specific. Overall, positive approach but with good amount of caution is advised for today.
Consulting Technical Analyst,
Tuesday, June 5, 2012
MARKET TREND FOR TODAY June 5, 2012
Precisely on the expected lines, the Markets staged a smart recovery after weak opening and has so far held on to the bottoms made on May 18th. The Markets opened on a weaker note and with a gap down on back of weak global cues and gave its intraday low of 4770.35 in the morning trade. However, it thereafter transformed into upward rising trajectory, though in a bit volatile manner and remain in that trajectory for the rest of the session. It not only recouped its morning losses but went on to trade in the positive too. Towards the end of the session, it gave intraday high of 4858.30, recovering almost 80-odd points from its day’s low and ended the day near the high point at 4848.15, posting a gain of 6.55 points or 0.14%. It continued to form a lower top and lower bottom on the Daily High Low Charts.
Expect the Markets to open on a flat t o moderately positive note today and look for directions and intraday trajectory would continue to remain critically important. The Markets have so far held on to the bottom formed on May 18th and it would be important for the Markets to sustain above those levels at Close as the Markets are still not completely out of woods as of today.
The levels of 4875 and 4930 are immediate resistance on the Charts and the levels of 4790 and 4740 are immediate supports on the Charts.
All lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 36.3132 and is neutral as it shows no negative divergence or failure swings. The Daly MACD continues to trade above its signal line.
At this juncture, it is important to note that the Markets are not completely out of woods as yet though it has held on the its previous bottom and has formed a minor Double Bottom supports on the Daily Charts. So, it would be important for the Markets that it maintains a positive trajectory post opening and remains above its critical support levels.
All and all, with no potential bottom formation confirmed and with the Markets struggling to keep the current support levels intact, the preservation of this Double Bottom support would be crucially important. It is advised to still avoid aggressive positions and keep protecting profits at higher levels. Overall, continuation of cautious approach is advised for today.
Consulting Technical Analyst,