Wednesday, November 6, 2013

Daily Market Trend Guide -- Wednesday, November 06, 2013

MARKET REPORT                                                                                    November 06, 2013
The Markets had a corrective volatile session, as such on expected lines as it ended the day with losses after a volatile session. The Markets opened the day on a negative note as expected and drifted further down in the morning trade. In the late morning trade, it made an attempt to recover from the opening lows as it managed to recoup most of its morning losses as it gave its day’s high of 6304.75, though still continuing to trade in negative territory. However, the Markets did not sustain these levels and gave up in the last hour and half of trade. It went on to give the day’s low of 6244.30 and finally ended the day at 6253.15, posting a net loss of 64.20 points or 1.02% while forming a lower top and lower bottom on the Daily High Low charts.


MARKET TREND FOR TODAY

Expect the Markets to open on a modestly negative note again and look for directions. As evident on the charts, the Markets should take support in the 6230-6250 zone and if it breaches these levels on the downside, we will see some more weakness creeping in. The intraday trajectory that the Markets form after opening would be crucial to decide today’s trend.

The levels of 6310 and 6135 would act as resistance for the Markets and the levels of 6230 and 6190 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 62.5643 and it is neutral as it shows no failure swings or any bullish or bearish divergence. The Daily MACD continues to remain bullish as it trades above its signal line. On the Candles, a falling window occurred. This usually implies continuation of a  bearish trend.

On the derivative front, NIFTY November futures has shed over 7.32 lakh shares or 3.16% in open interest. This is a negative indicator as it signifies that some long unwinding has been done from higher levels yesterday.

Given the pattern analysis read along with F&O data, there are high chances that the Markets continue with their corrective mood and drift lower. There are chances that the Markets attempt to take support at 6230 levels. Any breach below this would make the Markets little weaker and continue with its correction. However, this will also keep the markets volatile seeing movements on either side while lacking clear directional bias.

Overall, as mentioned, the Markets would remain little volatile and continue to trade in a range with a corrective bias. It may see lack of directional bias and continue to see mild profit taking. Intraday trajectory would be crucial. While shorts should be avoided as there is no structural breach on the Charts, even long position should be created moderately.

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


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