Thursday, May 23, 2013

Daily Market Trend Guide -- Thursday, May 23, 2013

MARKET TREND FOR TODAY                                                            May 23.2013
What seemed as a stable and quietly positive session for the Markets turned out otherwise as the Markets fizzled out in the last hour and half of the trade to end the day with modest losses as it continued with its corrective activities, quite on expected lines. The Markets opened on a flat to moderately positive note and gave its intraday high of 6147.60 in the very early minutes of the  trade. Thereafter, for the most part of the session, it moved sidewards in a very narrow 25-odd points range. However, in the last hour and half of the trade, the Markets saw weakness creeping in again. It not only dipped into the red but went on to give the day’s low of 6074.45. It saw a very mild recovery towards expiry of the session and finally ended the day at 6094.50, posting a modest loss of 19.60 points or 0.32% while continuing to form a lower top and lower bottom on the Daily High Low Charts.


Today’s analysis remains more or less on the similar lines again. The Markets have again closed very near to its pattern support and today’s opening would be very crucial to decide the trend for today as well as for immediate short term. Expect the markets to open on a lower note and look for directions. If the Markets open below the pattern supports of 6095, this level would act as intraday resistance for the rest of the day.

For today, the levels of 6125 and 6160 shall act as immediate resistance for the Markets. The supports still come in much lower at 6045 and 6010 levels.

The lead indicators too paint a similar story. The RSI—Relative Strength Index on the Daily Chart is 59.2186 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The MACD too trades above its signal line, but continues to move very slowly towards negative crossover.

On the derivative front, the NIFTY May futures have added over 6.28 lakh shares or 2.42% in the Open Interest. This shows that there are some amounts of shorts that are being built up in the system.

Overall, today’s opening of the Markets is all set to decide the trend for today as well as for immediate short term. The level of 6095 is a good enough pattern support and any opening or drifting of the Markets below that level will see some more weakness creeping in. There are all chances of the correction continuing as there are no triggers on the upside and the pattern analysis point towards continuing weakness / corrective activities.

All and all, we continue to advice to approach the Markets with cautious outlook. Though there are no downward triggers, there are no triggers for the upside as well. In view of this, and after such a stupendous up move, the Markets usually correct. However, as mentioned in our yesterday’s edition, certain defensive sectors may out perform and this may prevent the Markets from correcting sharply but the undertone certainly remains tired and weary. While continuing a very selective approach in the Markets, cautious outlook is advised for today.

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


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