MARKET REPORT
September 23, 2013
The Markets needed a reason to correct and RBI provided an
excellent platform to do so ! The Markets on Friday opened on a modestly
positive note and traded in a capped range in the morning on expected lines by
the time the RBI came up with its Credit
Policy. The Markets saw a temporary spurt as it traded positive and gave its
intraday high of 6130.95. The RBI Credit Policy announcements wherein it hiked
the rate by 25bps just did not go well which the Markets which was expecting
either no change or a positive surprise. The Markets gave out a very volatile
and severe reaction to this as it saw a parabolic straight line fall of nearly
198 points as it touched its day’s low of 5932.85. In the last hour of the
trade, it did saw some minor short covering from lower lowers and it ended the
day at 6012.10, still posting a loss of 103.45 points or 1.69% while forming a
lower top and sharply lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
There is no doubt that the Markets were overdue for
correction and RBI certainly provided a platform for this. Today as well, we
are set to see a negative opening in the Markets and we will see the Markets
opening negative and continue with its correction, at least in the initial
trade. Beginning today, we enter the expiry week and we will see the session remain
dominated with rollover centric activities as well.
For today, the levels of 6130 has become an immediate
resistance and top for the Markets. Any
sustainable up move shall occur only after the Markets move past this level.
The supports exist at 5910 and 5842 levels.
The RSI—Relative Strength Index on the Daily Chart is
62.8938 and it is neutral as it shows no bullish or bearish divergences or any
kind of failure swing. The Daily MACD remain
bullish as it trades above the signal line.
On the derivative front, the stand alone data for the Month
of September shall not give any conclusive directional indication. However, the
total open interest for NIFTY futures have been shed which very clearly
indicates the unwinding of long positions from higher levels.
Given the above reading, the technical indicators certainly
suggest the continuation of corrective activity in the Markets. This also gets
support from the F&O data which has consistently shown the shedding of Open
Interest. Given all this reading, it is primarily certain that the Markets will
have a restricted up move from these levels and the levels of 6130 has now become
a immediate top for the Markets and any up move that has to occur will occur
only after the Markets move past these levels.
All and all, the Markets shall see a negative opening and
the correction would continue. It is important to see if the correction
continues or again, the Markets sees a range bound consolidation. In either
case, some weakness along with volatility shall persist. Any fresh positions
that has to be taken should be taken very selectively. However, selective
sectoral out performance shall continue. While avoiding aggressive positions,
cautious outlook should be maintained.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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