Thursday, July 19, 2012
MARKET TREND FOR TODAY July 19, 2012
The Markets have tried to find a bottom yesterday as it showed a smart recovery after lackluster opening and found support precisely at the levels mentioned in our past editions of Daily Market Trend Guide. The Markets opened on a flat note and after trading flat slipped a bit to trade in the negative. The Markets gave its intraday low of 5169.05 in the later morning trade. This was against the support levels of 5170 mentioned by us. The Markets saw smart recovery from those levels as it recovered again to trade flat. After moving in a range, it perked up further in the afternoon trade and went on to give the day’s high of 5222.85. It finally ended the day at 5216.30, posting a modest gain of 23.45 points or 0.45%. The Markets have formed a lower top and lower bottom on the Daily High Low charts.
For today, expect the Markets to give a decently positive opening on back of strong technicals supported by positive global cues. The Markets have ended the day near the high point of the day after taking support at critical support levels and today, it is expected to continue with that up move. The crucial point here would be to see if the Markets is able to capitalize on this positive opening and therefore, the intraday trajectory would be critically important today.
The levels of 5265 and 5310 are immediate resistance on the Charts and the levels of 5170 continue to remain critical support level.
The RSI—Relative Strength Index on the Daily Chart is 52.56 and it shows no negative divergence or failure swing. The Daily MACD continue to trade below its signal line. The NIFTY and Stock futures have continue to add Open Interest which indicates that apart from some short covering that was seen, fresh shorts too have been added.
As of now, the technicals indicate that the Markets have tried to inch ahead out of the consolidation range again and continuation of that up move is expected, at least in the initial session. The key would be able to capitalize on that and thus the importance intraday trajectory. While protecting profits at higher levels, selective purchases may be made. Overall, positive outlook is advised for today.
Consulting Technical Analyst,
Tuesday, July 17, 2012
MARKET TREND FOR TODAY July 17, 2012
Despite the lower than expected inflation numbers which came in at 7.25% for June as against 7.55% in May, the Markets remained in a range and it furthered its losses in the last hour of the trade to end the day with modest losses. The Markets opened on a moderately positive note and traded in a capped range. It dipped into the red in the late afternoon trade, but again recovered to trade in the green. However, the Markets continued to remain a capped range until late afternoon. The Markets extended its losses on lower volumes as it dipped into the red again and went on to give the day’s low of 5190.45. It finally ended the day at 5197.25, posting a moderate loss of 30 points or 0.57%. It has formed a lower top and lower bottom on the Daily High Low Charts.
The Markets are expected to open today on a decently positive note and trade positive at least in the initial trade. The intraday trajectory would be important to maintain and capitalize on the expected morning gains. Though the Markets ended negative yesterday, it is still in a broad range and above its critical support levels.
For today, the levels of 5220 and 5265 are immediate resistance on the Charts whereas the levels of 5190 and 5170 are important supports.
The lead indicators continue to point towards some weakness as RSI—Relative Strength Index on the Daily Chart is 50.5040 and it has reached its lowest value in last 14-days which is bearish. Also, the RSI has made a new 14-day low, but NIFTY has not yet, and this is bearish divergence. The Daily MACD remains bearish as it trades below its signal line.
Having said this, it is equally important to note that the NIFTY has added in Net Open Interest and so has stock futures. This implies that with the yesterday’s decline, there has been no unwinding in the Markets. Also important to note is that there is no structural breach on the Charts as the Markets continue to trade above its critical support levels of 5170-5160 levels. So long as the Markets trade above this levels, there is no negative breach on the Charts and no long lasting weakness can be expected. Also, NIFTY PCR stands at 1.17, leaving significant gap for the up side.
All and all, range bound movement expected again as the Markets trade in a range. We continue to advice to avoid shorts as there is no structural breach on the Charts. Also, aggressive longs are not advised as the Markets continue to remain in a range. It would be prudent to remain selective in purchases while protecting profits at higher levels. Overall, positive caution is advised for today.
Consulting Technical Analyst,
Monday, July 16, 2012
MARKET TREND FOR TODAY July 16, 2012
What happened to be a positive beginning in the Markets turned out to be a flat ending as the Markets continued to remain in a range and consolidate and the caution reigned ahead of the key inflation data on Monday and guided RBI Action on July 31st. The Markets opened positive and gave its intraday high of 5267.15 in the early minutes of the trade. It continued to trade with capped gains but it saw a gradual decline as the session went ahead. It saw a sudden dip in the afternoon trade as it went into the red and gave the day’s low of 5216.85. The Markets again traded in capped range and finally ended the day at 5227.25, posting a nominal loss of 8 points or 0.15%. It has formed a slightly higher top and slightly lower bottom on the Daily High Low Charts. On a Weekly note, the NIFTY has ended the week with net loss of 89.70 points or 1.68%.
The Markets are likely to open today on mildly positive note and trade in a capped range in the initial session. The key inflation numbers are expected today and the Markets are likely to react to it which are expected to be bit higher. This is likely to keep the Markets in a range initially, and then bit volatile later in the session.
For today, the levels of 5275 and 5310 are immediate resistance on the Charts and the levels of 5205 and 5170 are immediate supports.
The RSI—Relative Strength Index on the Daily Chart is 53.6878 and it has reached its lowest value in last 14-days which is bearish. The RSI has set a new 14-day low whereas NIFTY has not yet, and this is also a Bearish Divergence. The Daily MACD too has turned bearish as it now trades below its signal line. On the Weekly note, the RSI is 53.0967 and it is neutral as it shows no negative divergence or failure swings. The Weekly MACD too is bullish as is trades above its signal line.
The NIFTY and Stock futures have continued to add in Net Open Interest in the current series and this certainly has an upward bias.
Having said this, there are two things to consider. The Markets shall trade this week on a double edged sword. The higher inflation number may be a bad news for the Markets, but they increase the chance of a rate action from RBI on July 31st. The Diesel price hike too is expected after the presidential polls. Secondly, the Daily charts show the consolidation / correction to continue and the Markets may touch the 100-DMA levels of 5173. But at the same time, the Weekly Charts show the technicals and the lead indicators intact with bias towards the upside.
All these factors combined are likely to keep the Markets in a broad trading range and volatile with the levels of 5175 - 5170 acting a major technical and pattern support.
All and all, Markets are likely to remain in a range and remain volatile too reacting to Inflation numbers today. With the global cues supportive, the negative technical factors would be resisted. Even otherwise, there is no negative breach until the Markets breaches the levels of 5170. Until this happens, shorts should very strictly be avoided and selective purchases may be made while protecting the profits at higher levels. Overall, cautious outlook is advised for today.
Consulting Technical Analyst,