Monday, April 15, 2013

Daily Market Trend Guide -- Monday, April 15, 2013

MARKET TREND FOR TODAY                                                             April 15, 2013
The Markets had a thoroughly disappointing session on Friday as it opened gap down and remained in a capped range thereafter in sideward trajectory till the end of the session to end the day with losses. The Markets opened gap down and after trading sideways, became further weak in the afternoon session as it gave it day’s low of 5494.90. It saw a mild recovery in the second half but did not do much to cut the losses. The movement in the sideways trajectory continued and the Markets finally ended the day at 5528.55, posting a loss of 65.45 points or 1.17% while forming a sharply lower top and lower bottom on the Daily High Low Charts. The Infosys was the biggest loser making  a major dent in the NIFTY which did not cheer the IIP data that was released.


The recovery / pullback that was seen in the Markets in last two session has abruptly came to an end by the Friday’s session. We may see some weaker opening today and can fairly expect the weakness to continue in line with weakness in Asian Markets. European Markets too closed weak on Friday, though US Markets have remained flat. The intraday trajectory would be important to decide the trend post opening and the Markets may test the Friday’s lows.

For today, the levels of 5490 and 5465 shall act as immediate supports for the Markets. The Markets would find resistance at 5540 and 5575 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.2299 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bearish as it continues to trade below its signal line. The pattern on the Candles has a “on-neck line”  which is potentially bearish and indicates continuation of weakness for the short term. On the Weekly Charts,  the RSI is 41.0052 and it has just reached the lowest value in last 14-weeks which is bearish. The Weekly MACD continues to trade below its signal line and is therefore, bearish.

On the derivative front, NIFTY Futures have continued to add over 4 lakh shares or 2.05% in Open Interest. Though creation of heavy shorts in the NIFTY has continued, it has also seen selling in the Cash Markets. Stockwide open interest has also added validating this reading.

Having said this, it is also important to note that the Markets have breached the 50-DMA on the WEEKLY Charts. There are fair chances that if the Markets breaches the Friday’s low, it can well slip to 5380-5400 levels.

All and all, there are no directional triggers for the up move in the Markets. Intermittent pullbacks may be seen in this week, but as mentioned often in our previous editions, sustainable up move shall occur only after the Markets moves past its 500-DMA. Until then, any trade that takes place will have a downward bias. Overall, it is advised to refrain from aggressive purchases and maintain high degree of caution in the Markets.

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



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