MARKET REPORT
July 12, 2013
The Markets had a robust session yesterday as it opened with
a gap up and sustained its gains throughout the session to end the day on a
very strong note. It moved past its 50-DMA as well at Close levels. The Markets
opened on a gap up note and soon spent the entire session in a 25-odd points
intraday band as it spent the session in a sideways trajectory, though
gradually adding gains. It went on to give the day’s high of 5948.85 in the mid
afternoon session. The Markets hovered around those levels until the end of the
session and finally ended the day at 5935.10, posting a strong gain of 118.40
points or 2.04% while forming a sharply higher top and higher bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
Today, technically speaking, since the Markets have ended
the day near the high point yesterday, it is likely to open on a modestly
positive note and continue with the up move. Expect the Markets to open on a
positive note and continue its up move at least in the initial trade. The
intraday trajectory would be important as it would be necessary for the Markets
to rule above 5916, which is the 50-DMA in order to achieve a possible breakout.
For today, the levels of 5965 and 5990 are immediate
resistance on the Charts. The supports come in at 5916 and 5860 levels.
The lead indicators point towards continuing bullish trend.
The RSI—Relative Strength Index on the Daily Chart is 56.7092 and it has
reached its highest value in last 14-days which is bullish. It does not show
any bearish or bullish divergence. The Daily MACD is bullish as it continues to
trade above its signal line. On the Candles, A rising
window occurred (where the top of
the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a
bullish trend. There have been 6 rising
windows in the last 50 candles--this makes the current rising window
even more bullish.
On the derivative front, NIFTY Futures have went on to
add yet another over 13.50 lakh shares or 8.73% in Open Interest. This is
greatly positive as it establishes that the yesterday’s up move has been
supported by long positions and it is not merely on account of sharp short
covering. NIFTY PCR stands at 1.22 as against 1.12.
Overall, the Markets have moved past the levels of
5916, i.e. the 50-DMA which has been the upper band of the broad trading range
in which the Markets have been consolidating in last couple of sessions after
over 300-odd points pullback. Yesterday, it has attempted a breakout and it
would be important to see that the markets rules above the levels of its
50-DMA. If it slips below that, we would be back in the trading zone/
consolidation zone and the consolidation would continue. If the up move
continues, then we might achieve a confirmed break out and a trend reversal.
All and all, the day is positive ahead. Expect the
Markets to continue it up move while it can remain artificially volatile /
dominated due to Infosys numbers. Overall, trading above 50-DMA would be
necessary and important. While shorts should be avoided, profits too should be
protected at higher levels and selective purchases may be made. Overall, cautiously
positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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