MARKET TREND FOR TODAY
March 21, 2013
The Markets got damaged more with political uncertainty
rather than reacting to the credit policy and this damage was continued in the
yesterday’s session also as the Markets ended yet another day with losses. The
Markets opened on a negative note and remained in negative territory for the
entire session. After opening negative, it traded in a range and thereafter
transformed itself into falling trajectory as it kept making gradual lows. It
though made a mild attempt to recover in the afternoon trade but did not
succeed. It went on to give the day’s low of 5682.30 towards the end of the session.
It saw a very mild recovery towards the end but ended the day at 5694.40
posting a net loss of 51.55 points or 0.90% while continuing to form a lower
top and lower bottom on the Daily High Low Charts.
Today, we are likely to see some respite from the weakness
that we have seen since last two sessions and the Markets may show some
calmness and some modest recovery. The Markets are expected to open on a flat
to mildly positive note and look for directions. Intraday trajectory would be
very important to decide the trend for today.
For today, the levels of 5663 and 5640 would be very
important supports not only for today, but also for coming sessions.
Lead indicators too suggest some potential stability in the
Markets. The RSI—Relative Strength Index on the Daily Chart is 36.1811 and it
does not show any failure swings. However, NIFTY has set a new 14-period low
but RSI has not, and this is BULLISH DIVERGENCE. The Daily MACD has reported a
negative crossover and now trades below its signal line.
On the derivative front, NIFTY March futures have shed over
9.35 lakh shares or 5.85% in open interest. This shows some unwinding taking
place in current series.
What we can make out from the above reading is that the
pullback that the Markets attempted has not resulted into trend reversal. It did
not make a higher bottom and is once again likely to take support at the lows
that it formed from where it pullback couple of weeks ago. These levels, as
mentioned earlier would act as major supports.
All and all, though some short term weakness may continue,
stability can certainly be expected as the Markets are approaching support in
form of Double Bottom. With the lead indicators showing some resilience, there
are chances that we see some support coming in at these levels. With no
breakdown on charts, while avoiding shorts, some selective accumulative
purchases can be made. Overall, cautious but positive outlook is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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