MARKET TREND FOR TODAY
March 05, 2013
The Markets had a listlessly negative session yesterday as
it opened weak on weak global cues, but spent the rest of the session trying to
move off its opening lows but still ended the day with modest losses. The
Markets opened on a negative note on back of weak global markets and gave its
intraday low of 5663.30 in the early minutes of the trade. Thereafter, the
Markets kept making listless and conviction less attempts to recover as it
gradually tried coming off its lows. However, it could not recover all of its
losses in the rest of the session. It finally ended the day at 5698.50, posting
a modest loss of 21.20 points or 0.37% forming a lower top and lower bottom on
the Daily High Low Charts.
The Markets are oversold. Today, we may see some modestly
positive opening today and we can see the Markets trade positive in the initial
session. However, having said this, it is very important to note that the
Markets are not completely out of the woods. Being oversold, it may see some
technical pullback, but it may test its important supports in coming sessions.
For today, the levels of 5745 and 5780 are immediate
resistance on the Charts. Supports come in much lower around its 200-DMA
5554.76.
The lead indicators of the Markets remain oversold. The RSI—Relative
Strength Index on the Daily Chart is 29.8613. It is neutral as it shows no
negative divergences or failure swings but it now trades in its OVERSOLD
territory .The Daily MACD continues to trade below its signal line and is
therefore bearish.
On the Candles, A lower shadow has occurred.
Typically this is a potentially bullish signal particularly when this occurs near
a low price level and when the Markets are oversold.
On the derivative front, NIFTY Futures have added massive
open interest of over 12.20 lakh shares or 7.97%.
Given the above reading, with the Markets being oversold,
there are technical chances of a pullback that we can witness either today or
in coming immediate sessions. However , this will still keep the Markets below
its supports which it broke. In order for the Markets to actually reverse its
trend, it will have to move past the levels of 5775-5800 and continue further
up move after brief consolidation. Only such pattern shall set stage for a technically
sustainable trend reversal.
All and all, until the Markets moves past the specified
levels, there may be a technical pullback with the Markets being oversold
currently but the sustainability of such pullback would be a question. However,
with the current status being oversold, it is advised to refrain from shorts
and fresh longs can be taken selectively but the profits on the long side too
should be very vigilantly protected. Overall, a mildly positive outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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