MARKET REPORT December
16, 2013
The Markets continued with its corrective action on Friday
as well as it opened on a negative note and ended the day with losses again for
the fourth day in a row. The Markets
opened on a negative note and never really attempted any recovery at any point
in the entire session. After opening on a negative note, the Markets remained
in falling trajectory and remained so for the entire session. During the day
the Markets kept making new intraday lows on a slow but gradual note. It went
on to give the day’s low of 6161.40 towards the end. It did not see any major
recovery at these levels either. It finally ended the day at 6168.40, posting a
net loss of 68.65 points or 1.10% while continuing to form a lower top and
lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, we are expected to see a flat opening in the Markets
with the Markets opening on a flat note and looking for directions. There will
be lack of directional consensus and the Markets are expected to trade in a
capped range with its 50-DMA of 6141 acting as support. The Markets would
remain in this state as it is expected to react to RBI Credit Policy slated to
come on December 18th. Though it has continued to add significant
open interest during these four days.
Today, the levels of 6190 and 6225 are expected to act as
resistance and the levels of 6141 and 6110 are expected to act as immediate
supports for the Markets.
The RSI—Relative Strength Index on the Daily Chart is
49.2670 and it continues to remain neutral as it shows no bullish or bearish
divergence or any kind of failure swings. The Daily MACD continues to remain
bullish as it trades above its signal line. On the Weekly Charts, the RSI is 56.3369
and is neutral. The Weekly MACD too remains bullish as well as it trade s above
its signal line.
On the derivative front, NIFTY December futures have shed a
nominal 2.39 lakh shares or 1.08% in open interest. This is the first time in
last five sessions that the Markets have reported a nominal drop in the Open
Interest.
Going by the pattern analysis, the Markets still trades
above all of its Daily Moving Averages. Today as well, even in case of moderate
weakness, the Markets are expected to take support at its 50-DMA which is 6141.
Only if it closes below this level and its filter, only then we can expect to
see any intermediate weakness in the Markets. The lead indicators as well as
the derivative data also do not show any major impending weakness until the
mentioned levels are breached on the
downside.
All and all, the session is likely to remain range bound
while lacking any clear directional bias. The Markets are likely to remain in arrange
while remaining little volatile. It is strongly advised to avoid creating short
positions as there is no structural breach on the Charts. Any decline should be
utilized to make selective purchases. The intraday trajectory would continue to
remain important. Overall, continuance of cautious optimism is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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