MARKET TREND FOR TODAY
January 07, 2013
The Markets had a day of consolidation again on Friday as it
spent the entire session in a extremely capped range and finally ended the day
with nominal gains. The Markets opened on a negative note and spent the first
half of the session trading in a capped and narrow range with limited and minor
losses. It gave its intraday low of 5981.55 in the mid session. However, in the
last hour and half of the trade, the Markets saw some recovery as it was off
its lows. It came off its lows and recovered to move into the positive
territory while giving the day’s high of
6020.75. It hovered around those levels for some time and finally ended
the day at 6016.15, posting minor gains of6.65 points or 0.11% while forming a
mildly higher top and a mildly lower bottom on the Daily High Low Charts.
Today, we can expect
a quiet start in the Markets. Expect the Markets to open on a flat to mildly
positive note and look for directions. The global markets too are trading flat
and quiet and we may see the same kind of quiet consolidation continuing in our
Markets too, with a bias tilted on the upside. The intraday trajectory would
therefore, remain important and critical.
For today, the levels of 6035 and 6060 shall act as
resistance for the day and the levels of 5950, the levels which the Markets
broke on the upside shall act as immediate support for the Markets.
The lead indicators point towards a positive bias. The RSI—Relative
Strength Index on the Daily Chart is 68.4654 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 continues trades above its
signal line.
However, there is some contradiction on the data of the
derivatives front. The NIFTY Futures have shed 3.53 lakh shares or 2.06% in
Open Interest. This signifies that the rise / recovery that we saw in the last
hour and half of the trade was more on account of short covering. The NIFTY PCR
stands at 1.05 as against 1.
This being said, it would be important to see if we see
fresh buying coming in after the short covering that we saw. If this happens we
may see this breakout continue with the upward move and if this does not
happen, then we can see the Markets again consolidating in a capped range, but
with positive bias.
All and all, even if the Markets consolidates, the bias
remain on the upside. In even of consolidation, we may see the Markets trading
in a range and in even of any weakness, the 5950 would come in at support.
However, with the bias on the upside, it is advised to refrain from taking any
shorts. While selective purchases may be made, profits too should be protected
at higher levels. Overall, positive approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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