Friday, August 31, 2012
MARKET TREND FOR TODAY August 31, 2012
The session yesterday on the expiry day of the August Derivative Series remained very volatile as the Markets opened on a negative note and traded in a capped range in volatile manner and saw a sharp bout of short covering towards the end of the session to end the day with modest gains. The Markets opened modestly negative and gave its intraday low of 5255.05 in the early minutes of the trade. This was against the support levels of 5251 mentioned by us. The Markets thereafter traded in a capped range, though remained very much volatile driven by rollovers. In the last half hour of the trade, the Markets saw a sharp rise on back of short covering and gave its intraday high of 5342.80. It finally ended the day at 5315.75, little off from its highs and ended the day with modest gains of 27.25 points or 0.52% while forming a lower top and lower bottom on the Daily High Low Charts.
Today, expect the Markets again to open on a moderately lower note and trade directionless in the initial trade. The Markets have held on to their support of 50-DMA which is 5255 and this shall continue to act as support and thus intraday trajectory would continue to play important part in deciding the trend for today.
The levels of 5255 shall continue to act as important support for the Markets today, being the 50-DMA. The weakness shall occur if the Markets dips below that, but until then, it is expected to remain in a range and equally volatile.
The RSI—Relative Strength Index on the Daily Charts is 51.3666 and is neutral as it shows no failure swing or any bullish/bearish divergence. The Daily MACD continues to trade below its signal line.
The NIFTY has reported less rollovers by 20% as compared to previous month, but has started the new series with PCR of 0.92%.
The Markets have another reason to remain volatile today as the Q1 GDP numbers are expected today and they are expected to remain dismal at 5.3-5.2%. However, any positive trigger will infuse momentum in the Markets. Also, FOMC meet would be watched but nothing is expected out of it as such with no material announcements coming in and this can lead to weaker sentiments in the global markets.
Having said this, so far as we are concerned, the Markets are expected to remain in a range, and also bit volatile and the levels of 5255 is expected to hold out as support. Further weakness will creep in only if it breaches these levels. Until this happens, volatility will stay and selective performance would be seen. However, Markets shall be devoid of any clear direction. It is advised to take fresh positions, but on a selective basis without too much of leveraging. Overall, cautious outlook is advised for today.
Consulting Technical Analyst,
Thursday, August 30, 2012
MARKET TREND FOR TODAY August 30, 2012
The pressure continued on the Markets today as it ended with losses on the fourth day in a row after opening on a mildly positive note. The Markets opened on a flat to mildly positive note and like it did in previous sessions, gave its intraday high of 5343.85 in the very early seconds of the trade and then immediately dipped into the red. The Markets thereafter traded in a range with capped losses but started losing further ground in the second half of the trade. The session remained dominated with heavy rollover activities as the Markets gave its intraday low of 5282.70 towards the end of the session. The Markets closed almost there at 5287.80, posting a loss of 46.80 points or 0.88% while forming a lower top and sharply lower bottom on the Daily High Low Charts.
The weakness that we saw yesterday is likely to continue today also, at least in the initial trade. The Markets are likely to open moderately lower and shall trade weak initially heavily depending upon the intraday trajectory that it forms later. Today is the expiry day of the current derivative series and we will see the session continuing to remain dominated with rollover centric activities.
The levels of 5280 and 5251 is expected to act as support today in form of 50-DMA.
The lead indicators continue to show some weakness. The RSI—Relative Strength Index on the Daily Charts is 47.7974 and it has reached its lowest point in last 14-days which is bearish. It does not show any bullish / bearish divergence either. The Daily MACD is bearish as it trades below its signal line.
The Markets yesterday have taken support on the 5280 levels and have closed little above it. If the Markets moves below those levels , the next support come in at 5251, which is the 50-DMA for the Markets.
Today is also the expiry day of the Markets and this shall keep the Markets volatile with a downward bias. It may happen that the Markets trades in a capped range but at the same time, the rollovers can bring volatility and sharp movements on the either side today. Overall, it is advised to avoid any aggressive stance in the Markets until the Markets show some stability as the 5400 levels have held out as key resistance as the Markets have corrected over 140 points since then. Continuation of highly selective approach with caution is advised for today.
Consulting Technical Analyst,
Wednesday, August 29, 2012
MARKET TREND FOR TODAY August 29, 2012
The Markets continued to drift lower for the third day in a row but the session remained quite volatile as the Markets swung either side and finally ended the day with modest losses. The Markets opened on a moderately positive note and gave its intraday high if 5359.25 in the very early seconds of the trade. After this, the Markets drifted lower and dipped into the red. After making a feeble attempt to recover, the Markets saw the pressure returning as it again drifted lower and went on to give the day’s low of 5312.60. However, it also saw a sharp recovery in the second half of the trade but finally ended the day at 5334.60, posting a modest loss of 15.65 points or 0.29%. It has continued to form a lower top and lower bottom on the Daily High Low Charts.
Expect the Markets to open again on a flat note and look for directions. Today, we enter into penultimate day of expiry of current derivative series and the session for today shall remain dominated heavy rollover centric activities. The intraday trajectory shall continue to remain important but at the same time, volatility too is expected to exist.
The levels of 5400 remains key resistance levels for the Markets and the immediate supports come in at 5300 and 5280 levels.
The RSI—Relative Strength Index on the Daily Chart is 54.1330 and it has reached its lowest value in last 14-days which is bearish. Further, the RSI has set a new 14-day low whereas NIFTY has not yet and so this is a Bearish Divergence. The Daily MACD too has reported a bearish crossover and thus now trades below its signal line which too is a bearish indicator.
As seen above, all daily lead indicators point a weak picture for the Markets. However, we may also see some intermittent pullbacks and this are likely because of the rollover centric activities. The Markets are likely to remain as volatile as yesterday, but the overall bias remains on the downside.
All and all, the immediate short term indicators remain weak. The negative sentiments fuelled by chaos at the Centre are also likely to weigh on the Markets for the immediate short term. The Markets may see two way swings due to rollover fuelled volatility but overall bias continues to remain on the downside. Highly stock specific approach with cautious outlook for the day is advised.
Consulting Technical Analyst,
Tuesday, August 28, 2012
MARKET TREND FOR TODAY August 28, 2012
The Markets had a thoroughly disappointing session as it opened on a mildly positive note and then drifted throughout the rest of the session and ended the day with modest losses. The Markets opened positive and gave their intraday high of 5399.15 in the very early minutes of the trade. The key levels 5400 continued to pose resistance as the Markets reversed the trend immediately after its day’s high and continue to gradually decline for the rest of the session. The Markets went on to give the day’s low of 5346.65 and finally ended the day around those levels at 5350.25, posting a modest loss of 36.45 points or 0.68%. It has formed a similar top and lower bottom on the Daily High Low Charts.
Today’s Market behavior is expected to remain similar to that of yesterday. A modestly positive to flat opening can be expected and then the Markets are expected to remain subdued with a downward bias. However, with the expiry week on, the session is also likely to remain dominated with rollover centric activities.
For today, with the levels of 5400 remaining as immediate resistance, the supports come in at 5330 and 5315 levels.
The lead indicators continue to paint a little weak picture. The RSI—Relative Strength Index on the Daily Chart is 56.4567 and it has reached its lowest value in last 14-days, which is bearish. Further, the RSI has set a new 14-year low whereas the NIFTY has not yet, and this is Bearish Divergence. The Daily MACD continues to trade above its signal line.
With the Open Interest figures of the current month remaining overall irrelevant due to rollovers count, given the technical patterns and the overall structure of the Charts, the levels have 5400 which we have been mentioning as one of the key levels have remained as a major resistance point. So, as we have said in our last couple of editions, this levels shall act as a immediate top and sustainable up move shall occur only after the Markets moves past this levels.
All and all, the Markets may remain in a range, also bit volatile given the rollover activities but are likely to trade with overall downward bias. However, selective outperformance would be seen. It is advised to remain highly stock specific and keep protecting profits at higher levels. Overall, cautious approach is advised for the day.
Consulting Technical Analyst,