Friday, May 24, 2013
MARKET TREND FOR TODAY May 24, 2013
The correction in the Markets intensified today as the Markets took a deep cut today after opening on the negative note. The Markets opened on a modestly negative note following weak global cues and even weaker technicals and remained in negative territory throughout the session. The Markets converted itself into falling trajectory soon after opening and kept drifting slowly but firmly for the entire session. The Markets opened below its pattern supports and never went up again. In the last minutes of the trade, the Markets went on to give day’s low of 5955.70. It hovered around those levels a bit and saw no recovery at all. It finally ended the day at 5967.05, posting a deep cut of 127.45 points or 2.09% while forming a sharply lower top and lower bottom on the Daily High Low Charts.
Today, we can expect the Markets to open on a flat note and look for directions but at the same time, we shall see some respite from the weakness that we saw yesterday. We can expect some stability in the Markets, at least in the initial session. However, given the rest of the technical indicators, we can also expect some consolidation at lower levels accompanied with range bound trade with a downward bias.
Fro today, the levels of 5990 an 6035 are likely to act as resistance and the supports come in at 5910 and 5890 on the downside. The level of 100-DMA which is 5892 is expected to act as support if the Markets weaken further from here.
The lead indicators continue to point towards continuing weakness. The RSI—Relative Strength Index on the Daily Chart is 48.6538 and it shows no negative divergence or failure swings. It has reached its lowest value in last 14-days and this is Bearish. However, it does not show any bullish or bearish divergence. We have been saying that the Daily MACD is slowing moving towards a negative crossover. Yesterday, it did report a negative crossover and today it trades below its signal line and it is therefore bearish.
On the derivative front, NIFTY May futures have shed over 16.50 lakh shares or 6.21% in Open Interest and this very clearly indicates that there is consistent offloading and unwinding of positions that has taken place yesterday and no shorts were created. This figures are enough for induce further weakness in the Markets.
Given the reading of the technical charts and its indicators, coupled with the F&O data, there are all chances that we see the correction continuing in the Markets. We might see a minor technical pullback in between, but overall, the bias still continues to remain on the downside.
Overall, it is advised that in case of a technical pullback happening, it is expected to remain short lived and again the corrective activities in the Markets are expected to take over. Long positions, if any should be taken very selectively and profits should be very vigilantly protected. While remaining light on overall positions, cautious outlook is continued to be advised as the bias still remains on the downside in spite of a technical pullback which may short lived.
Consulting Technical Analyst,
Thursday, May 23, 2013
MARKET TREND FOR TODAY May 23.2013
What seemed as a stable and quietly positive session for the Markets turned out otherwise as the Markets fizzled out in the last hour and half of the trade to end the day with modest losses as it continued with its corrective activities, quite on expected lines. The Markets opened on a flat to moderately positive note and gave its intraday high of 6147.60 in the very early minutes of the trade. Thereafter, for the most part of the session, it moved sidewards in a very narrow 25-odd points range. However, in the last hour and half of the trade, the Markets saw weakness creeping in again. It not only dipped into the red but went on to give the day’s low of 6074.45. It saw a very mild recovery towards expiry of the session and finally ended the day at 6094.50, posting a modest loss of 19.60 points or 0.32% while continuing to form a lower top and lower bottom on the Daily High Low Charts.
Today’s analysis remains more or less on the similar lines again. The Markets have again closed very near to its pattern support and today’s opening would be very crucial to decide the trend for today as well as for immediate short term. Expect the markets to open on a lower note and look for directions. If the Markets open below the pattern supports of 6095, this level would act as intraday resistance for the rest of the day.
For today, the levels of 6125 and 6160 shall act as immediate resistance for the Markets. The supports still come in much lower at 6045 and 6010 levels.
The lead indicators too paint a similar story. The RSI—Relative Strength Index on the Daily Chart is 59.2186 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The MACD too trades above its signal line, but continues to move very slowly towards negative crossover.
On the derivative front, the NIFTY May futures have added over 6.28 lakh shares or 2.42% in the Open Interest. This shows that there are some amounts of shorts that are being built up in the system.
Overall, today’s opening of the Markets is all set to decide the trend for today as well as for immediate short term. The level of 6095 is a good enough pattern support and any opening or drifting of the Markets below that level will see some more weakness creeping in. There are all chances of the correction continuing as there are no triggers on the upside and the pattern analysis point towards continuing weakness / corrective activities.
All and all, we continue to advice to approach the Markets with cautious outlook. Though there are no downward triggers, there are no triggers for the upside as well. In view of this, and after such a stupendous up move, the Markets usually correct. However, as mentioned in our yesterday’s edition, certain defensive sectors may out perform and this may prevent the Markets from correcting sharply but the undertone certainly remains tired and weary. While continuing a very selective approach in the Markets, cautious outlook is advised for today.
Consulting Technical Analyst,
Wednesday, May 22, 2013
MARKET TREND FOR TODAY May 22, 2013
The Markets showed first clear signs of impending correction as it ended the day with losses amid greatly volatile session. The Markets opened on a flat note and after trading briefly in the green, it slipped into the negative territory and continued to drift lower while forming a falling channel on the intraday charts. The Markets traded at a low point of the day by the mid session. However, the afternoon trade saw a very sharp spurt as the Markets saw a sharp rise of over 60-odd points from the day’s low. It not only recouped all of its morning losses but traded in the green and went on to give the day’s high of 6180.25. However, this spurt was not sustained. It remained short lived as after deliberating for a while near the high point of the day, the Markets saw equally sharp paring of gains. It dipped into the red giving the day’s low of 6102.35. It finally ended the day at 6114.10 posting a net loss of 42.80 points or 0.70%.
Today’s opening would be crucial for the Markets. The Markets have ended the day very near to its pattern support levels of 6095. The Markets are expected to open flat and it would be critical to see if they are able to maintain the levels above 6095. Any dip below 6095 may see some temporary weakness and corrective activity continuing in the Markets.
For today, the levels of 6135 and 6160 shall act as immediate resistance on the charts and supports still come in much lower at 6095 and 6020 levels.
The lead indicators are neutral. The RSI—Relative Strength Index on the Daily Chart is 61.1136 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continue to trade above its signal line.
On the derivative front, NIFTY May futures have added very negligible 1.94 lakh shares or just 0.75% in open interest. This signifies that the spurt we saw in the mid session can be due to heavy short covering and at the same time, it can also be observed that no major shorts were created in the Markets on its way down either in the last hour and half of the trade.
Overall, the Markets continue to remain in the corrective mode. The Markets may find some temporary support at its pattern support levels of 6095 but any breach of this levels will see the Markets continue to correct and we may continue to see volatility of the kind we saw today ingrained in the trading session.
All and all, we continue to reiterate that the Markets have seen correction set and the levels of 6199 have become a temporary top for the Markets. Fresh sustainable up move shall occur only when the Markets moves past this level again. Also, there are no triggers as to suggest that the Markets have found some bottom and may reverse. In case of consolidation, defensives shall continue to out perform. A very selective approach in taking fresh positions with guarding of profits on either side with cautious outlook is advised for today.
Consulting Technical Analyst,
Tuesday, May 21, 2013
BRIEF MARKET FORECAST FOR THE DAY
Markets likely to open on a flat note and look for directions. Given the technical reading and supported by the derivative data, the Markets are likely to continue with some corrective activity and might continue to consolidate in a given rage.
While avoiding fresh long positions, any upside should be used to protect profits at higher levels. We advice to continue to approach the Markets with high degree of caution.
Consulting Technical Analyst,
Monday, May 20, 2013
MARKET TREND FOR TODAY May 20, 2013
Despite continuing negative divergence on the Daily Charts, the Markets continued to end the day with moderate gains again after spending the entire session consolidating in the negative territory. The Markets opened on the moderately positive note but soon dipped into the red after initial seconds of the trade. Thereafter, it continued to move in a narrow range with capped losses for the most part of the session. It moved in 30-odd points range in the negative territory as it gave its intraday low of 6146.15 in the second half of the session. However, the Markets saw some spurt in last hour of the trade as it not only recouped its entire day’s losses but managed to move back into the green. It went on to give the day’s high of 6199.95 towards the end of the session. It finally ended the day at 6187.30, posting a net gain of 17.40 points or 0.28% while continuing to form a higher top and higher bottom on the Daily High Low Charts.
Before we begin for today, we would like to begin with pointing out that the negative divergence continues on the Daily Charts. The Markets are likely to see a modestly positive opening again, but at the same time, we would like to strongly reiterate that given the continuing bearish divergence on the Daily Charts, the Markets are due and set for long pending correction. The technicals are highly unhealthy for the Markets to continue the up move in this manner and correction from higher levels just cannot be ruled out for now.
For today, the levels of 6215 and 6225 are immediate resistance levels on the charts while the supports come in much lower at 6120 and 6075 levels.
The lead indicators continue to point towards the rise getting unhealthy and they clearly point negative divergences on the Daily Charts. The RSI—Relative Strength Index on the Daily Chart is 68.4886 and it shows no failure swings. But the NIFTY has set a new 14-day high but the RSI has not, and this is a clear BEARISH DIVERGENCE. The Daily MACD continues to trade above its signal line but very slowly, it moves towards negative crossover. On the Weekly Charts, the RSI is 64.5668 and it has just reached its highest value in last 14-weeks.The Weekly MACD trades above its signal line.
On the derivative front, NIFTY May futures have not reported any change in Open Interest as it added just 36,950 shares or 0.14% in open interest. This signifies that there has been no major buying in the spurt that we saw in the last hour of the trade on Friday.
Having said this, it is very important to know that the Markets may show resilience at higher levels despite continuing bearish divergence on the Daily Charts. This can occur mainly due to liquidity that drives the Markets. However, as we have mentioned many times in our recent past editions that such rise becomes unhealthy and ultimately technicals do take over. In this case, we may see the Markets trading with modest up move in the initial trade, but going strictly by technical charts, it is just a matter of time that we see some correction coming in.
Under such circumstances, there are bright chances that we may see a positive and stable opening again, but at the same time, possibility of the correction setting in from higher levels just cannot be ruled out and this probability remains very high, sooner or later. Given this reading, we strongly advise against creating any long positions with such technical reading. We strongly advice retail traders to maintain liquidity to preserve current positions but strictly avoid creating fresh positions. It is advised to approach the Markets with continuing high degree of caution.
Consulting Technical Analyst,