MARKET TREND FOR TODAY
February 22, 2013
Yesterday was a weakest day in last seven months for the
Markets as it succumbed to global weakness. In line with global weakness, the
Markets too opened on a negative note and as such never reversed the trend and
ended the day with a deep cut. The Markets opened on a mild gap down on back of
weaker global Markets and it continued to drift downwards after brief sideways
trade. It went on to give the day’s low of 5844.40 towards the end of the
session. It showed no signs of recovery and finally ended the day at 5852.25,
posting a deep cut of 90.80 points or 1.53% forming a lower top and lower
bottom on the Daily High Low charts.
Technically speaking, the Markets have ended the day below
the pattern supports of 5850 and also a notch below 5962 and its 100-DMA
support of 5961. The Markets are expected to open on a mildly negative note
today also and look for directions. The weakness shall persists is the Markets continue to trade below the levels
mentioned above.
The levels of 5850 and 5925 are immediate resistance for the
Markets. The supports come in much lower at 5780 and 5750 for the Markets.
The lead indicators too do not paint a encouraging picture.
The RSI—Relative Strength Index on the Daily Chart is 36.4655 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.
On the derivative front, the NIFTY Futures have added
nominal over 1.14 lakh shares or 0.71% in Open Interest. At least heavy
offloading is not reported if we go by these figures and shorts have continued
to remain in the system as yet.
The Markets will have to move past the levels of 5950
intraday and at Close, above 5965 in order to avoid further weakness. Until
this happens, we will see the Markets trading with a weak bias.
All and all, the picture looks bit difficult with the
Markets trading below the 5850 levels. We will see volatile and weak trade so
long as Markets trade below these levels. Volatility will remain ingrained in
the system. However, there are still possibilities that the shorts that exist
in the system will prevent the Markets from breaking down further and support
might come in at levels around this. It is advised to remain light on the
positions. Cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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