Friday, November 2, 2012
MARKET TREND FOR TODAY November 02, 2012
The Markets had a relatively buoyant session yesterday, especially in the second half wherein it perked up yet again on back of short covering to end the day with modest gains after a subdued start. The Markets opened on a mildly negative note on expected lines and traded in a capped range in the morning trade while it gave its intraday low of 5601.95. However, after the late morning trade, the Markets came off its lows and recovered into the positive territory. It kept giving highs, though overall remaining in a capped range as it saw the levels of 5649.75 as its intraday high. It ended the day at 5645.05, posting a modest gain of 26.35 points or 0.45% forming a higher top and higher bottom on the Daily High Low Charts.
Today would be critical session in the Markets. The Markets are likely to see a buoyant opening on back of positive global cues but at the same time shall open near its pattern resistance levels and thus it would be critically important to see if it sustains its opening gains. The intraday trajectory that the Markets shall form post opening today would be extremely important to see if the Markets are able to capitalize on the opening gains.
The levels of 5670 and 5710 shall act as resistance levels and the supports would now come at 5630 and 5560 levels.
The RSI—Relative Strength Index on the Daily Chart is 50.7387 and it is neutral as it shows no bullish / bearish divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.
Having said this, it is important to note that NIFTY futures have continued to shed open interest by over 3.20 lakh shares or 1.86% and this clearly signifies that the rise that we saw was more of short covering than fresh buying. This trend – i.e. rise in NIFTY with shedding of Opening Interest, is being witnessed since last couple of session, especially last three sessions, clearly suggests that the Markets are just not completely out of the woods.
Having said this, it is likely that the Markets see positive opening and then transforms into a falling trajectory to come off its highs. This likelihood grows even more as the opening levels of the Markets that would be pattern resistance in form of falling trend line shown in the Charts.
All and all, buoyant opening is likely but it would be extremely important to see if the Markets sustains those opening gains and remains in positive rising trajectory for the day. Retail investors are advised to now avoid aggressive buying again and protect profits on either side. While remaining selective on the stocks, cautious approach is advised for today.
Consulting Technical Analyst,
Thursday, November 1, 2012
MARKET TREND FOR TODAY November 1, 2012
The Markets had a range bound and volatile session yesterday but it ended the day on a moderately positive note although it has resisted perfectly near the levels of 5630 mentioned by us in our yesterday’s edition of Daily Market Trend Guide. Markets opened on a moderately positive note but soon dipped into the negative territory. It managed to pullback into the green, but saw some pressure again as it again dipped into the negative, giving the day’s low of 5583.05. However, in the second half of the trade, the Markets saw some short covering led rally. It managed to recover from its day’s low and also managed to give the day’s high of 5624.40. It finally ended the day near that point at 5619.70, posting a moderate gain of 21.80 points or 0.39%, while continuing for form a lower top and lower bottom on the Daily High Low charts.
For today, expect the Markets to open on a moderately negative note and look for directions. The Markets are likely to open shedding most of its yesterday’s gains and the levels it resisted yesterday would continue to pose immediate resistance. Intraday trajectory that it forms would be critical to dominate the trend for today.
For today, the levels of 5630 and 5655 shall continue to act as immediate resistance and the levels of 5530 shall continue to act as immediate support for the Markets.
All lead indicators continue to point towards directionless trade with little downward bias. The RSI—Relative Strength Index on the Daily Chart is 47.9091 and it 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.
In yesterday’s trade, the NIFTY Futures have reported shedding of Open Interest of over 4.06 lakh shares or 2.27%. This is a clear indication of short covering and also, it can be clearly interpreted that the rise in the second half of the session was due to short covering and not due to fresh buying.
As mentioned in our yesterday’s edition, the levels of 5630, which the Markets broke on its way down shall now as resistance followed by the levels of 5650.
Having said this, the Markets have formed a small falling channel from its high of 5830 and no sustainable fresh up move is expected until the Markets reverses this and this will cause the Markets to continue to trade in a range with downward bias.
All and all, we can fairly expect a range bound trade to continue with the levels of 5630 acting as immediate resistance. The Markets are likely to test the supports of 5530-5550 levels even if we see intermittent pullbacks as yesterday. Fresh positions can be taken, but very selectively as sectoral out performance would be seen. Overall, moderately cautious outlook is advised for today.
Consulting Technical Analyst,
Wednesday, October 31, 2012
MARKET TREND FOR TODAY October 31, 2012
Disappointment with RBI Rate announcements of keeping Repo and Reverse Repo Rates unchanged provided perfect reason to the otherwise technically weak Markets to cry foul and breach it important support levels. The Markets opened on a positive note and trade in a capped range in the initial trade as it gave its intraday high of 5689.90 in the initial trade. The Markets traded in a capped range until the RBI made announcements. The Markets reacted negatively and this saw the weakness creeping in the Markets. The Markets lost ground quickly and went on to give the day’s low of 5589.90, breaching its important support levels of 5630. It never really recovered and finally ended the day at 5597.90, posting a net loss of 67.70 points or 1.19% while forming a lower top and lower bottom on the Daily High Low charts.
For today, expect the Markets to open on a flat and quiet note and look for directions. It is likely that the initial trade sees directionless movement with downward bias. The levels of 5630 that it broke yesterday are likely to act as support in case of a technical pullback.
Today, the levels of 5630 would act as immediate resistance followed by 5670 and the levels of 5540 would act as immediate support in form of a small Double Bottom formation.
Lead indicators point towards continuing weakness, barring some intermittent pullbacks. The RSI—Relative Strength Index on the Daily Chart is 45.4048 and it has reached its lowest value in last 14-days which is bearish. It does not show any bullish or bearish divergence. The Daily MACD continues to remain bearish as it trades below its signal line.
Having said this, in the yesterday’s trade, the NIFTY has added in very nominal open interest of 0.5%. This shows that some minor shorts were created in yesterday’s trade. NIFTY Open Interest PCR stands at 1.03 as against 1.10.
If we go by pattern analysis, the NIFTY has broken its support levels of 5630 and this is a immediate short term sell signal. However, in case of technical pullbacks, or any intermittent pullbacks that we see, t he upside is expected to remain limited and capped at 5630 which would now act as resistance.
All and all, the bias on the Markets remain on the downside unless it moves past 5630 levels which it broke yesterday and sustains above those levels. Until this happens, we may continue to see lingering weakness in the Markets with occasional technical pullbacks. Fresh positions may be taken very selectively with continuing cautious outlook in the Markets.
Consulting Technical Analyst,
Tuesday, October 30, 2012
MARKET TREND FOR TODAY October 30, 2012
The Markets spent entire session yesterday in a falling downward trajectory as it came off its highs after a positive start to end the day flat with negligible gains. As it has been doing in previous sessions, the Markets saw a positive opening and gave its intraday high of 5698 in the morning trade. However, in the second half, it changed its sideward trajectory and transformed itself into a falling channel and continued to drift for the rest of the session. It went on to give the day’s low of 5645.10. It however, recovered a bit from those levels and finally ended the day at 5665.60, posting a negligible gain of 1.30 points or 0.02%, forming a almost parallel bar on the Daily High Low Charts.
Today, expect the Markets to open on a flat and quiet note and the session is likely to remain directionless in the initial trade. The RBI is coming up with its Monetary Policy and the Markets are likely to react to the rate announcements which shall come in later today. This is likely to keep the Markets very volatile, but the bias continue to remain on the downside.
The levels of 5720-5740 shall continue to act as resistance the level of 5630 shall act as support. Any drift below this level would take the Markets further on the downside.
The RSI—Relative Strength Index on the Daily Chart is 52.7125 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continue to trade below its signal line.
On the Derivative side, the NIFTY has continue to show gradual and slow unwinding of long positions. The NIFTY futures have shed over 1.68 lakh shares or 0.90% in open interest.
Having said this, it certain that RBI announcements shall make the Markets dance on its tunes in the mid session. Any positive surprise shall see a pullback in the Markets but that will face resistance between the levels mentioned above.
There is vast differences in the expectation in the Markets. The Markets stands completely divided (through polls) regarding cuts in Repo and Reverse Repo. But at the same time, majority expects a minor CRR cut. Any positive surprise shall lead to a pullback in the Markets which have been trading in a broad range.
All and all, even in case of a pullback, it will still be in a range and as mentioned on past several occasions, sustainable up move shall occur only above the levels of 5740. Until this happens, volatility shall continue to remain ingrained in the Markets and the bias will continue to remain on the downside with the levels of 5630 acting a major supports. Any breach shall take the Markets further down. Overall, continuance of cautious outlook is advised for today.
Consulting Technical Analyst,