Wednesday, April 10, 2013

Daily Market Trend Guide -- Wednesday, April 10, 2013

MARKET TREND FOR TODAY                                                            April 10, 2013
What seemed to be a stable session and a decent recovery, turned out to be yet another disappointing session as the Markets pared all of its gains in the second half of the session to end the day with losses. The Markets saw a decently positive start and after trading with decent, but capped gains in the morning trade, it perked up further to give the day’s high of 5603.05. However, the second half of the session saw some pressure building up again as the Markets not only came off its lows and pared its gains but went on to give the day’s low of 5487, coming off nearly 120-odd points from its high. It overed around those levels but no significant recovery was seen towards the end. It finally ended the day at 5495.10, posting a net loss of 47.85 points or 0.86% forming a higher top but lower bottom on the Daily High Low charts.


With the yesterday’s fall, the Markets are oversold. Today, we may see some technical pullback in the Markets but the sustainability of the same would be dictated by the intraday trend that the Markets forms after the opening. With the Markets being oversold, a possibility of some stability with the technical pullback cannot be ruled out even with the Markets remaining in overall falling trend.

For today, the levels of 5475 is likely to act as immediate support followed by 5460. The resistance is seen at 5530 and 5545 levels.

The RSI—Relative Strength Index on the Daily Chart is 29.1077 and it now trades in OVERSOLD territory. It has reached its lowest value in last 14-days which is bearish but it does not show any bullish or bearish divergence. The Daily MACD continues to trade below its  signal line and therefore continues to remain bearish.

On the derivative front, NIFTY futures have added yet another massive 10.46 lakh shares or 6.09%  in Open Interest showing continuous addition of massive shorts in the system.

Having said this, there are chances of stability returning to the Markets and technical pullback being seen at least in the initial session. Also, with the Markets being oversold, as mentioned earlier, a technical pullback would be imminent even if the Markets later on remains in the overall falling channel.

All and all, even with the Markets remaining in overall falling channel, a possibility of technical pullback cannot be ruled out. However with no trend reversal in sight and this may being just a pullback, volatility cannot be ruled out. While avoiding shorts at these levels, selective purchases may be made. Overall, very selective approach with high degree of caution is advised for today.

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


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