MARKET TREND FOR TODAY
May 10, 2013
While the volatility continued to stay, yesterday’s session
saw the Markets consolidating, much on expected lines as it moved either way to
finally end the day with moderate losses. The Markets opened on a modestly
positive note and after trading positive in the opening minutes of the trade,
it slipped into the negative. The Markets traded sideways in the negative
territory in the morning trade in a extremely narrow and capped range before it
moved back into the green while giving the day’s high of 6084.70. However, the
last hour and half of trade saw volatility returning again as the Markets
suddenly pared its gains and it not only went back into the negative but gave
its day’s low of 6040.45. After hovering a bit around those levels, it finally
ended the day at 6050.15, posting a moderate loss of 19.15 points or 0.32%
while forming a similar top and higher bottom on the Daily High Low Charts.
Today also, the analysis would continue to remain on similar
lines as the Markets are likely to continue to consolidate. Expect the Markets
to open on a flat note and look for directions. Intraday trajectory would
continue to be crucial as the Markets are likely to continue to consolidate
today with chances of profit taking from higher levels as the Markets have
resisted to pattern resistance as mentioned in our yesterday’s edition.
For today, the levels of 6085 and 6110 would act as
important resistance and the supports come in at 6010 and 5975 levels.
The lead indicators remain neutral to mildly bearish. The
RSI—Relative Strength Index on the Daily Chart is 67.3217 and it is neutral as
it shows no bullish or bearish divergences or any failure swings. The Daily
MACD continues to trade above its signal line. On the Candles, An engulfing bearish line occurred (where a black
candle's real body completely contains the previous white candle's real
body). The engulfing bearish
pattern is bearish during an uptrend (which appears to be the case with
NIFTY). It then signifies that the
momentum may be shifting from the bulls to the bears.
On the derivative front, NIFTY May futures have added
3.87 lakh shares or 1.83% in Open Interest. This shows no significant
offloading has been done yesterday even if the Markets pared its gains in the
last hour and half of trade.
We continue to reiterate our advice on similar lines
like that of yesterday. The Markets ARE showing potential signs of some
continuing consolidation or possibilities of minor profit taking. Even in case
of any up move, it would move towards getting overbought again. Further, it has
resisted to its pattern resistance – Double Top—at 6085 levels and these levels would continue to act as resistance
for today as well.
All and all, with the Markets continuing to resist at
the mentioned levels, we continue to reiterate that no aggressive fresh long
positions should be built and any available up move should be utilized to
protect profits in existing positions. Any fresh positions should be created
very selectively and over leverage should be avoided. Overall, continuation of
cautious approach is advised for today as well.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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