MARKET REPORT
September 06, 2013
Led by banking stocks, the Markets saw a big up move
yesterday as it opened with a gap up and remained in sideways trajectory while
maintaining gains throughout the session. The Markets saw a big gap up opening
and soon formed its intraday high of 5625.75 in the first hour of the trade.
The Markets thereafter, remained in sideways trajectory and traded in some 40-odd
point range. They maintained this range for the entire session as the Markets
sustained those gains. It finally ended the day at 5592.95, posting a net gain
of 144.85 points or 2.66%. This was fuelled by massive up move in banking
stocks. The Markets have ended making a sharply higher top and higher bottom on
the Daily High Low Charts.
MARKET TREND
FOR TODAY
The Markets have ended near the high point of the day
yesterday and technically speaking, it is likely to open on a positive note and
continue with its up move, at least in the initial trade. Today as well, we can
fairly expect the Markets to open on a modestly positive note and look for
directions. However, the Markets are expected to open near its resistance
levels and therefore, it would be crucially important to see if the Markets
sustain the opening gains.
For today, the levels of 5635 and 5660 would act as
immediate resistance levels for the
Markets. The supports come in
lower at 5520 and 5490 levels.
The lead indicators remain firmly in place. The RSI—Relative
Strength Index on the Daily Chart is 52.1637 and it has reached its highest
value in last 14-days, which is bullish. It does not show any bullish or
bearish divergence. The Daily MACD remains bullish as it continues to trade
above its signal line. On the Candles, A rising window occurred. This
usually implies continuation of bullish trend. There have been 6 rising windows in the last 50 candles
which makes the trend even more bullish.
On the derivative front, the NIFTY have shed over 7.09 lakh
shares or 3.84% in open interest. This signifies that there was a massive short
covering as well in the Markets yesterday. It would be important to see if this
gets replaced with fresh longs.
Given the above reading, it is important to note that the lead indicators on the Daily Charts
remain intact and in place but there is shedding of Open Interest in the derivative
segment. This would mean that there are chances of positive opening but at the
same time, we can again see some paring of gains or some profit taking from
higher levels. This can make the session volatile as well.
All and all, we can fairly expect a decent opening again in
the Markets. However, given some reduction in OI, we can also expect the
Markets to consolidate or see some paring of gains from the higher levels. In
this case, the intraday trajectory would be crucially important. It is advised
to protect profits at higher levels and avoid very aggressive buying however,
the bias still remains intact despite some chances of consolidation / profit
taking as lead indicators remain intact. Overall, cautious optimism is advised
for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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