MARKET TREND FOR TODAY
March 26, 2013
What seemed to be a
perfect pullback for the most part of the session, fizzled out in the later
part of the session as the Markets came off over 95 points from its day’s high
to end the day with modest losses. The markets opened on a positive and
stronger note and gave its intraday high of 5718.40 in the early minutes of the
trade. The Markets continued to trade strong for the most part of the day in a capped range
moving in a narrow band. However, in the last hour and half of the trade, the
Markets suddenly pared all of its gains
and it not only went into the negative territory but went on to give the day’s
low of 5624.40. It finally ended the day at 5633.85, posting a net loss of
17.50 points or 0.31% forming a higher top but lower bottom on the Daily High
Low Charts.
Markets are poised at a very critical juncture. Expect the Markets
to open on a flat to moderately negative note following global weakness and
look for directions. Intraday trajectory would be extremely important as the
Markets still continue to trade above its important 200-DMA support at close
levels. In case of lower opening today, it would be critical for the Markets to
see that it closes not below its 200-DMA.
For today, the levels of 5620 and 5590 shall act as
important supports for the Markets.
The lead indicators show that some temporary weakness is
likely to continue. The RSI—Relative Strength Index on the Daily Chart is
32.5352 and it has reached its lowest value in last 14-days which is bearish.
However, it does not show any bullish or bearish divergences. The Daily MACD is
bearish as it continues to trade below its signal line.
On the derivative front, the NIFTY futures have added in
total open interest showing creation of shorts again in the system. The NIFTY
PCR stands as low as 0.78 which is very near to its oversold zone.
Having said this, it is important to note that as of now,
the Markets have closed above its 200-DMA which is 5621.44 today. With negative
opening imminent today, it would be very important for the Markets to improve
before it closes for today so that there is no breach of this support. On the
other hand, in case of any continuing weakness, the Markets shall get oversold
and thus even if the weakness remains, it may be limited with no breach of the
filters expected.
All and all, until temporary weakness is likely to continue
in the initial trade but there are also chances
that we see improvement as we go ahead into the session. Rollovers shall
also dominate the day’s activities as we are into expiry week. The behaviour of
the Markets near its 200-DMA would be critical to watch out for. Overall
cautious outlook is continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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