MARKET TREND FOR TODAY
January 22, 2013
The Markets behaved very much on expected lines as it did
not had a runaway rally and in fact, continued to consolidate in a range bound
manner, ended the day with modest gains. The Markets opened on a positive note
and spent the entire session trading into the gain with capped gains. After opening moderately positive and
trading with capped gains, the Markets did pare some of its gains to give the
day’s low of 6065.10. In the second half of the session, Markets perked up a
bit and it went on to give the day’s high of 6094.35. It hovered around those
levels in a very capped manner again and finally ended the day at 6082.32,
posting a modest gain of 17.90 points or 0.30% while forming a higher top and
higher bottom on the Daily High Low Charts.
Today, expect the Markets to open on a flat note and look
for directions. The Markets show clear signs that it might continue to open
flat but continue to trade in a capped range while consolidating bit more
before it moves up further. Intraday trajectory would be extremely important
however, given the pattern analysis; consolidation on moderate volumes is more
likely.
The levels of 6105
and 6130 are likely to act as immediate resistance levels and the supports come
much lower at 6015 and 5950.
The lead indicators of the Markets as well as the pattern
analysis suggests that it would be a while before we see a “sustainable”
runaway rally. There are very clear indications that we may see the Markets
continue to consolidate and even very mildly correct while keeping the
underlying trend intact. The RSI—Relative Strength Index on the Daily Chart is
65.9473 and though it does not show any failure swing, the NIFTY has set a new
14-day high whereas the RSI has not. This is bearish divergence. On the other
hand, the MACD continues to remain bullish as it trades above its signal line.
On the derivative front, NIFTY January futures have added
over 1.55 lakh shares in Open Interest this is certainly a positive sign as no
unwinding is seen at these levels.
Overall, given the reading of the F&O data, there is
certainly no weakness in the underlying trend. However, given the reading of
the lead indicators and pattern analysis, the mild possibility of Markets
consolidation and minor profit taking at higher levels too cannot be ruled out.
Given this, it is best advised to continue
to remain very selective while making fresh purchases and protect profits
vigilantly at higher levels. Shorts should be strictly avoided as underlying
current remains intact. Positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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