Tuesday, March 19, 2013

Daily Market Trend Guide -- Tuesday, March 19, 2013

MARKET TREND FOR TODAY                                                                   March 19, 2013
The Markets remained in corrective mode in line with global weakness but at the same time showed some resilience as expected as it did not dip below its opening lows much and ended the day with modest losses. The Markets started the day on a negative note following global weakness and opened with some minor gap down. However, post opening, it moved in a capped range and in the mid session gave its intraday low of 5814.35. However, the Markets did not break its opening capped range that it formed and in the second half of the session, saw some improvement as it came off its lows. It finally ended the day at 5835.25, posting a net loss of 37.35 points or 0.64% forming a lower top and lower bottom on the Daily High Low Charts.

Today, some stability and positive trade may be expected, at least in the initial trade. The Markets may open on a flat to mildly positive note and look for direction. The global screed looks bit greener and on our Charts, the levels of 5800 is likely to act as support. Intraday trajectory would be crucial to dominate the trend today and at the same time, Markets are also likely to react to RBI Credit Policy announcements later today.

For today, the levels of 5862 and 5880 are likely to act as resistance and the levels of 5800 and 5780 are likely to act as immediate supports.

The lead indicators remain neutral to mildly bullish like yesterday. The RSI—Relative Strength Index on the Daily Chart is 46.3233 and is neutral as it shows no failure swings or bullish or bearish divergences. The Daily MACD continues to remain bullish as it trades above it signal line.

On the derivative front, the NIFTY March futures have added over 2.86 lakh shares or 1.92% in Open Interest. This signifies creation of some shorts in the system before the reaction of the Markets to RBI Credit Policy announcements.

The Markets shall remain volatile in the later part of the day as it would, as usual, give knee jerk reaction to the RBI Credit Policy announcement. Markets expected 25 bps cut in the Repo rate and expect CRR to remain unchanged. 

All and all, after initial range bound trade, the Markets shall react to RBI Announcements. However, so long as it maintains levels above 5800 would not see any break in the attempt of its reversal after making bottom couple of weeks ago. However, if it dips below 5800, it may induce some temporary weakness. Overall, it is advised not to create aggressive positions until the directional trend for the day is clear. While profits should be protected everywhere, cautious optimism is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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