Friday, January 4, 2013
MARKET TREND FOR TODAY January 04, 2013
The Markets spent yesterday’s session is what can be called a quiet consolidation. The Markets opened on a mildly positive note, remained in a capped range and ended the day with minor gains. The Markets, after opening on a mildly positive note, dipped mildly into the red to give the day’s low of 5986.55 in the very early minutes of the trade. Thereafter, it again came back into the positive territory and remained positive throughout the session. The Markets spent the entire session in a capped range as it gave its intraday high of 6017. At one point of time, the Markets pared all of its gains but climbed back to those levels again in the second half of the session. It finally ended the day at 6009.50, posting a minor gain of 16.25 points or 0.27% while forming a higher top and higher bottom on the Daily High Low Charts.
Today, we may again see some consolidation continue in the Markets. The Markets are expected to open on a flat to mildly positive note and look for directions. The intraday trajectory would be crucial. The Markets shall continue to remain in a breakout mode until it maintains the levels above of 5950. Minor profit taking along with positive consolidation cannot be ruled out.
For today, the levels of 6030 and 6065 would act as resistance. The levels which the Markets broke on the upside, i.e. 5950-5940 shall continue to act as supports.
The lead indicators show a mild bias on the upside, at least as of now. The RSI—Relative Strength Index on the Daily Chart is 67.9245 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it now trades above its signal line.
On the derivative front, NIFTY Futures have shed a very nominal 3200 shares or 0.02% in Open Interest. We can say it has remained unchanged. The NIFTY PCR stands at 1, as against 0.99.
Going as per the Pattern Analysis, the breakout has occurred, but we have not seen a runaway rise, as it was expected, especially after such a strong sideward and range bound consolidation that we saw in last two months. Though the lead indicators show a mildly bullish bias, we may continue to see consolidation to continue with an upward bias but at the same time, minor profit taking cannot be ruled out.
All and all, the breakout still remains in place but at the same time, some consolidation and minor profit taking can also be seen. In this phase, the Markets shall remain, once again in a range and some amount of volatility shall remain ingrained in it. It is strongly suggested that profits on existing positions should be very vigilantly protected. Shorts should be strictly avoided and very cautious approach should be adopted while taking fresh positions. Positive caution is advised for today.
Consulting Technical Analyst,
Wednesday, January 2, 2013
MARKET TREND FOR TODAY January 02. 2013
Though the Markets resisted yesterday all throughout the session to the upper end of the broad trading range that the Markets have been trading in, it portrayed a very buoyant undercurrent as it ended the day with decent gains. The Markets opened stronger on a positive note and remained positive throughout the session. After opening on a positive note, the Markets spent the session, in a more or less sideward trajectory, butt during the day, did not lose ground and witnessed sustained across the board buying. In the mid session, it went on to give the day’s high of 5963.90. It again traded sideward until the end of the session and finally ended the day at 5950.85, posting a decent gain of 45.75 points or 0.77%.
We are all set to see a strong gap up opening today which shall be caused as a reaction to the US Senate clearing the US Fiscal Cliff deal. This gap up opening shall cause the Markets open above the upper end of the broad trading range that we have been trading in since over a month and a half and thus, the Markets are set to achieve a technical breakout on the upside today. The intraday trajectory shall be crucial to see if fresh buying continues or some profit taking comes in.
The resistance levels for today would be 6020 and 6045 and the levels that were acting as resistance until today, i.e. 5950 and 5930 shall act as supports in case of gap up opening.
The lead indicators present little different picture as RSI—Relative Strength Index on the Daily Chart is 62.9947 and it does not show any failure swing. But it NIFTY has set its 14-day high but RSI has not and this is Bearish Divergence. The Daily MACD is still bearish as it continues to trade above its signal line. HOWEVER, this might change as technical breakout is achieved due to external news flows. However, it also indicates mild chances of profit taking coming in at higher levels.
On the Derivative front, NIFTY Futures have added over 6.35 lakh shares or 3.88% in Open Interest and NIFTY PCR stands little higher at 1.02 as against 1.01.
Having said this, technically speaking, we are set to achieve a technical breakout and this shall, technically speaking put the Markets in state of upward momentum for the immediate short term. Going further from there, little profit taking can be expected.
All and all, stage set for upward technical breakout and upward momentum for the immediate short term. Profits should be monitored for existing positions and should be protected and booked at appropriate levels. Selective purchases can also be made. Overall, positive outlook is advised for today.
Consulting Technical Analyst,
Monday, December 31, 2012
MARKET TREND FOR TODAY December 31, 2012
The session on Friday again saw a bout or sharp recovery towards the end after spending the session in a listless manner and ended the day with modest gains. The Markets opened on a positive and higher note on Friday but after briefly trading in a capped range, slowly transformed into falling channel and kept gradually losing ground. The Markets pared almost all of its opening gains as it gave a day’s low of 5879.50. Though it never dipped into negative, it pared all of its opening gains in the day’s trade. However, in the last half an hour of the trade, the Markets saw a very sharp recovery, probably on account of short covering. The Markets regained all of its lost gains and gave the day’s high of 5915.75. It finally ended the day at 5908.35, posting a modest gain of 38.25 points or 0.65% while forming a lower top and higher bottom on the Daily High Low Charts.
Today, we enter into the last trading session for the year 2013 when the Global Markets are closely watching the developments in the US over the fiscal cliff issue. Markets are expected to open on a flat to mildly positive note again. The Markets are still very much within the broad trading range that they have been trading in. Therefore, the opening of the Markets, and its behaviour vis-à-vis the critical resistance levels shall be crucial to decide the trend for the Markets.
For today, the levels of 5940-5950 shall continue to act as key resistance levels for the Markets. The supports come in at 5850 and 5810 levels.
On the Daily Charts, the RSI—Relative Strength Index is 58.9432 and it is neutral as it shows no bearish or bullish divergences. It also does not show any failure swings. The Daily MACD is bearish as it trades below its signal line. On the Weekly Charts, the RSI is 66.6720 and it does not show any failure swings. However, the Weekly RSI has reached its lowest in last 14-weeks which is bearish. The Weekly MACD continues to remain bullish while trading above its signal line.
On the derivative note, the NIFTY Futures have shed over 1.33 lakh shares or 0.81% in Open Interest. This signifies that the last hour spurt that we saw in the Markets was more of a short covering than any fresh buying. The NIFTY PCR stands at 1 as against 0.88.
From the above reading, it is clear that the Markets have a neutral to mildly negative bias until we move past the levels of 5940-5950 in a convincing manner and give a sustainable upward breakout. Until this happens, the Markets will trade in a range with a downward bias and the volatility in the Markets shall refuse to go away. Also, the pending US Fiscal cliff issue will be closely observed and reacted to by the Global Markets and this will have its effect on Indian Markets.
Again speaking purely on technical grounds, no up move can be expected until we move past the 5940-5950 levels. Until this, it is advised to remain very selective and light on positions while protecting profits vigilantly at higher levels. Overall, mildly positive approach with high degree of caution is advised for today.
Consulting Technical Analyst,