MARKET TREND FOR TODAY
February 20, 2013
After spending the most part of the session in totally flat
and directionless manner, the Markets saw sharp recovery in the last hour and
half of the trade and ended with smart gains. The Markets opened on a flat note
and traded directionless heading nowhere until late afternoon trade. It kept
moving in a very capped range and traded mildly negative as it gave its
intraday low of 5883.15. However, the last hour and half of the trade saw sharp
recovery as the Markets pulled back on back of short covering as well as some
fresh buying. The Markets came into the positive territory and kept its sharp
up move intact. It went on to give the day’s high of 5947.55 and finally ended
the day at 5939.70, posting a smart gain of 41.50 points or 0.70% while forming
a higher top and similar bottom on the Daily High Low Charts.
Today, the Markets are likely to open on a flat to
moderately positive note and look for directions. The Markets is not completely
out of woods and it will have to move past its pattern resistance of 5950-5955
levels and also need to close above its 50-DMA in order to have a sustainable
reversal and up move. The intraday trajectory therefore will continue to remain
critically important to decide the trend for today.
For today, the levels of 5950 and 5975 levels shall act as
important resistance levels. The 50-DMA is 5961.26 and the Markets will have to
close above those levels in order to continue with its up move.
The lead indicators paint a neutral picture. The RSI—Relative
Strength Index on the Daily Chart is 47.5811 and it is neutral as it shows no
failure swings or any bullish or bearish divergence. The Daily MACD continues
to trade below its signal line.
On the derivative front, NIFTY Futures have added over 4.28
lakh shares in open interest. This is certainly a positive sign as it signifies
that the rise that we saw yesterday was not merely because of short covering
but also due to creation of fresh longs.
The Markets has its trend intact. However, as mentioned
earlier, it will have to move past its patter resistance for a sustainable up
move. Until this happens, possibility of a volatile range bound trade cannot be
ruled out.
All and all, the Markets are likely to strengthen itself
before the Union Budget. However, while not taking this for granted, it is
advised to keep protecting profits at higher levels. Fresh positions can be
created on selective basis while strictly avoiding shorts as the overall trend
remains intact and the Markets have an upward bias. Cautious optimism is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.