Friday, July 27, 2012
MARKET TREND FOR TODAY July 27, 2012
The expiry session yesterday turned out to be utterly disappointing, especially in the last hour and half of the trade wherein the Markets saw vertical deep cuts after spending the entire day in a extremely narrow range. The Markets opened positive and gave its intraday high of 5126.30 in the early seconds of the trade. It soon dipped into negative, but it traded in a very narrow range with capped losses. This continued until late afternoon session, but the Markets saw a sharp volatile and vertical cut in the last hour and half of trade. This was mainly due to rollover dominated activities as the premium in the August series rose. It saw a intraday low of 2032.40. It finally ended the day at 5043, with net loss of 66.60 points or 1.30%. The July series has ended with net loss of 2.30% in NIFTY. It has formed a lower top and lower bottom on the Daily High Low Charts.
What was seen yesterday was a pure scare that had happened lead by severe rollover activities. Though, on the Charts, the Markets breached the important supports, it is set to give a gap up opening today and open above the critical supports that it breached. The key would be to sustain above those levels and the intraday trajectory would thus be of great importance today.
For today, the levels of 5102-5015 has both the moving averages, 50-DMA and 200-DMA and these would continue to act as resistance. It would be of critical importance that after the gap up opening that is expected, the Markets remains on the positive rising intraday trajectory and capitalized on the opening gains.
The RSI—Relative Strength Index on the Daily Chart is 36.2329 and it has reached its lowest value in last 14-days. Though, it does not show any negative divergence. The Daily MACD continues to trade below its signal line.
Yesterday’s session has remained heavily dominated with rollover centric activities, especially in the last hour of the trade. It has ended up adding phenomenally large Open Positions. NIFTY alone has added over 60 lakh shares in Open Interest. Stock Futures have shown similar trend. This signifies huge creation of shorts and they are all likely to lend support. Another important factor to be seen is the behavior of the Markets post opening vis-à-vis its 50 and 200-DMA and the intraday trajectory that it forms post opening.
All and all, as of now, it is strongly advised not to attempt to any shorts until the yesterday’s lows are breached again. There are huge open positions that has been added and a short trap can occur. Most of the NIFTY components have gone oversold and it is all likely that the Markets again moves up to its 200-DMA, consolidate there for a while and moves ahead. Even aggressive purchases may be avoided, however selective purchases can be made. Optimism is advised for today.
Consulting Technical Analyst,
Wednesday, July 25, 2012
MARKET TREND FOR TODAY July 25, 2012
The Markets showed some resilience yesterday after Monday’s terribly weak show as it ended the day with nominal gains after the initial weakness. The Markets opened on a moderately positive note and traded positive in a capped range in the morning session. However, in the mid session, it dipped into negative as it saw a bit volatile paring of gains. It went on to give day’s low of 5103.25. Again, it saw a equally sharp rise as it not only recovered its losses, but went into positive territory and also further went on to give the day’s high of 5144. It finally managed to end the day at 5128.20, posting a moderate gain of 10.25 points or 0.20%. The volumes continued to remain higher than the average. The Markets have formed a lower top and similar bottom on the Daily High Low Charts.
Today, again expect a flat opening in the Markets and the analysis for today stands more or less similar to that of yesterday. The Markets are within their filters of the earlier support and trade above two critical supports of 200-DMA and 50-DMA. The key to avoid further weakness would be the sustenance above these levels and for this, intraday trajectory would play a critical role in deciding the trend for today. Also, today is penultimate day for expiry of current series and thus rollover activities are likely to dominate the trend for today.
For today, the levels of 5102 and 5090 shall continue to act as major support at Close levels.
The RSI—Relative Strength Index on the Daily Chart is 43.4329 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to trade below its signal line.
NIFTY has added 1.91 lakh shares in Open Interest whereas Stock Futures have added 3.94 Crores in Open Interest. This signifies that there has been no short covering yesterday and some long positions / rollovers too have been added.
All and all, continuation of yesterday’s trend likely. The Markets shall remain in a range and there would be no structural breach unless it breaches its critical levels mentioned above. Until them, aggressive long positions and shorts should be avoided. Overall, selective approach with positive optimism is advised for today.
Consulting Technical Analyst,
Tuesday, July 24, 2012
MARKET TREND FOR TODAY July 24, 2012
Markets had a thoroughly disappointing session as it succumbed to global weakness and drifted lower after a negative opening to end the day with further losses. The Markets opened on a weaker and negative note and opened around its short term support levels. As the session went ahead, it showed no signs of recovery and went on to give the day’s low of 5108.10. No attempts to recover were seen as the Markets ended the day near the low point of the day at 5117.95 posting a loss of 87.15 points or 1.67%. Though the Markets breached the short term support levels, it still remained within the filters and closed above its serious long term support levels. The volumes remained higher than the average and it has formed a sharply lower top and lower bottom on the Daily High Low Charts.
For today, expect the Markets to open on a flat to mildly positive note and look for directions. We can expected some stability to return as the Markets currently are very near to its important support levels. The intraday trajectory would continue to remain important and it shall dominate the trend for the day.
The levels of 5101, which is the 200-DMA for the Markets and the levels of 5089 which is the 50-DMA are likely to act as major supports for the Markets as Close levels. This is especially when, there is still no structural breach on the Daily Charts.
The RSI—Relative Strength Index on the Daily Charts is 42.2230 and it has reached its lowest point in last 14-days. Though it does not show any negative / bearish divergence. The Daily MACD continues to trade below its signal line.
Given this fact, it is important to note that there is net addition of Open Interest in Nifty Futures and Stock Futures across the board which signifies heavy creation of shorts in the system. Further to this, the NIFTY PCR stands at 0.99, which is quite healthy at this point.
Another important factor to note that the Markets are very near and trades a notch above its critical support levels of 200-DMA and 50-DMA. Further important to note from the pattern analysis is that the 50-DMA and 200-DMA are all set to give a positive crossover in coming days.
All and all, this being expiry week, we may see the movement dominated with rollover activities. The external factors might keep the markets tizzy and range bound and bit volatile, but only for a while. Since there is no structural breach as of today on our Charts, any positions, on either side should be taken quite selectively. Aggressive shorts should be avoided. Overall, continuation of cautious outlook is advised with mild optimism for today.
Consulting Technical Analyst,
Monday, July 23, 2012
MARKET TREND FOR TODAY July 23, 2012
The Friday saw a very listless and lackluster session as the Markets opened negative and spent the entire session in a extremely narrow range and ended the day with moderate losses. The Markets opened on a negative note and gave its intraday low of 5197.50 in the early morning trade. It then spent the entire session in a very narrow 20-odd point range and ended the session around the same levels at 5205.10, posting a moderate loss of 37.60 points or 0.72%. It has formed a lower top and lower bottom on the Daily High Low Charts. On a Weekly note, the Markets have ended the week with moderate loss of 22.15 points or 0.42%. The volumes remained below the average.
For today, though there is no negative signal / breach on the Daily or Weekly Charts, the domestic Markets are likely to open on a lower and negative note following global weakness and look for directions. Here, the technical would come into play as the opening levels would be around the support levels on the Charts and it would be crucial to see if the Markets takes support around these levels during the day.
For today, the levels of 5165 and 5150 would be crucial support levels and the behavior of the Markets vis-à-vis these levels would be important to watch for.
Importantly, apart from there being no negative breach on the Daily and Weekly Charts, the lead indicators too continue to remain very much in place. The RSI—Relative Strength Index on the Daily Chart is 50.8012 and it shows no negative divergence or failure swings. The Daily MACD trades below its signal line. Even on the Weekly Charts, the RSI is 52.1612 and it is neutral as it shows no negative divergence or failure swings. The Weekly MACD is bullish as it trades above its signal line.
Further important to note that there has been no significant fall in the Open Interest is recorded in this entire week and thus, there are no indications of any high unwinding has been seen in the Markets.
However, we enter the expiry week today, and the sessions in the coming weeks are likely to remain dominated with rollover centric activities. That being said, the Markets shall also remain range bound and volatile given the technicals, but it is important to note again that there is no negative breach / signals as of today on Daily or Weekly Charts.
All and all, opening around support levels expected. It would be critical to see if the Markets recovers as we go ahead in the session. Intraday trajectory would be very important to decide the trend for today. Aggressive positions on either side to be avoided and adequate liquidity should be maintained. Overall, cautious outlook is advised for today.
Consulting Technical Analyst,