Tuesday, June 18, 2013

Daily Market Trend Guide -- Tuesday, June 18, 2013

MARKET REPORT                                                                                       June 18, 2013
The Markets had a volatile session yesterday and it reacted to RBI Policy announcements exactly as analysed in our yesterday’s edition of Daily Market Trend Guide. The Markets opened modestly negative note and traded with capped losses in the morning trade. It reacted bit violently as expected to the RBI Policy Announcements wherein the RBI kept the key rates unchanged on expected lines. However, reacting to this, it gave its intraday low of 5770.25 in the late morning trade. However, after bottoming out near these levels, the Markets rebounded from its day’s lows. It not only recouped all of its losses to trade flat, but also went on to trade in the positive territory while gradually making new highs. It recovered almost 80-odd points from its day’s low as it gave its intraday high of 5854.90 in the last minutes of the trade. The Markets hovered around those levels and finally ended the day at 5850.05, posting a net gain of 41.65 points or 0.72% while continuing to form a higher top higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The Markets are again likely to open flat and look for directions. It is in close vicinity of its 100-DMA on the upside and the 200-DMA on the down and the technical and pattern analysis is likely to keep the Markets in a capped range making it range bound. The intraday trajectory would be critical to determine the trend for the day as selective out performance cannot be ruled out.

The levels of 5879 which is the 100-DMA and the levels of 5902 which is the 50-DMA of the Markets are likely to pose immediate resistance to the Markets. The supports come in at 200-DMA  which is 5802.

The RSI—Relative Strength Index on the Daily Chart is 44.6762 and it is neutral as it shows no bullish or bearish divergence or failure swings. The Daily MACD remains bearish in the immediate short term as it trades below its signal line. 

On the derivative front, NIFTY June futures have added over 14 lakh shares or 8.95% in Open Interest. This is a very positive indicator and it certainly shows that the recovery that we saw from the yesterday’s lows was not because of mere short covering but was also due to fresh longs that were seen added.

Given this reading of the technical charts, pattern analysis read along with the F&O data, the bias certainly remains on the upside. However, the Markets will have to move past the levels of its 50 and 100DMA and trade above 5905 in order to have a fresh sustainable rally. Until this happens, the Markets will find itself in a trading range and the sessions would be capped and little volatile. But as mentioned just above, the bias certainly remains on the upside.

All and all, given the positive cross over of the 50 and 100-DMA on the Daily Charts, even with any short term weakness or any capped / ranged session, the possibility of the Markets moving past the levels of 5900 remains bright. It is recommended to avoid any kind of fresh shorts. Any temporary downside should be used to make selective purchases as even in range bound trade, selective out performances are likely to be seen. Overall cautious, but positive outlook is advised for today.

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


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.