Friday, June 28, 2013
MARKET REPORT June 28, 2013
The Markets staged a very smart pullback yesterday, much on expected lines which strengthened in the second half as the Markets ended the day with robust gains. The Markets opened the day on a positive note on back of favourable technicals, F&O data and global cues and traded sideways while maintaining its gains in the morning trade. After trading sideways in the first half of the session while smartly sustaining its gains, the gains in the Markets intensified further in the second half. The Markets perked up further and went on to give the day’s high of 5699.35. The Markets hovered around those levels in the second half and finally ended the day at 5682.35, posting a robust gain of 93.65 points or 1.68% while forming a higher top and higher bottom on the Daily High Low Charts.
MARKTE TREND FOR TODAY
Today, technically speaking, since the Markets have ended near the high point of the day, they are expected to open positive and continue with their up move. However, today, we are set for something better than just a positive opening. Expect a gap up opening again today and the Markets are expected to open on a strong and gap up note and look for directions. The opening levels would be just around its 200-DMA and it would be important to see the behaviour of the Markets and the intraday trajectory it forms post opening.
For today, the immediate resistance on the Charts post opening would be the levels of 5755 and 5618, which is the 200-DMA for the Markets.
The lead indicators continue to show positive bias. The RSI—Relative Strength Index on the Daily Chart is 40.6859 and it is neutral as it shows no failure swings or any kind of bullish or bearish divergences. The Daily MACD is bearish as it trades below its signal line but is moving towards an positive crossover.
On the derivative front, NIFTY Futures have went on to add yet another over 22.50 lakh shares in Open Interest and the NIFTY PCR has begun the month at 1.08.
All factors, global cues, the overall technicals and also the F&O data which have been showing huge additions in open interest in last couple of session will provide a very solid platform for a gap up opening today. The increase in gas prices too will have its share of positive sentimental effect. The opening would be around its 200-DMA levels and the reaction to the Markets around those levels would be important.
All and all, we are set to have a good day ahead. Our strict advice of not shorting in last couple of sessions in paying off now as such sharp pullback was imminent and over due. Even if the Markets opens around its 200-DMA or notch below it, there are chances of a very mild profit taking and even if the Markets consolidates around those levels, the bias remains positive and the undertone certainly remains bullish as of now. Overall, positive outlook is advised for today.
Consulting Technical Analyst,
Thursday, June 27, 2013
MARKET REPORT June 27, 2013
What seemed as a stable session for the Markets turned out to be a dampener as the Markets lost some ground in the last hour of the trade on back of heavy rollovers and currency weakening while in the process continuing to add open interest. The Markets opened on a modestly positive note and soon gave its intraday high of 5635.25 in the early hour of the trade. Though not able to sustain at those levels, the Markets pared those gains to trade flat. However, the Markets then continued to trade in a very capped and narrow range with modest gains throughout the session, more or less in sidewards trajectory. The Market saw some sudden pressure coming in as the Markets drifted lower to dip into negative and give day’s low of 5579.35. After hovering around those levels for a while, the Markets finally ended the day at 5588.70, posting a modest loss of 20.40 points or 0.35% while forming a lower top but higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
We have been mentioning in our previous editions of Daily Market Trend Guide that one should avoid shorts as the Markets are relentlessly adding Open Interest and thereby creating heavy shorts. Today, we are set to see a gap up opening and the Markets are likely to open and trade strong, at least in the opening trade. It would be important for the Markets to sustain opening gains. However, today is last day of expiry of current derivative series and volatility shall remain because of this.
For today, the levels of 5665 and 5710 are immediate resistance levels on the Charts. The supports come in at 5570 and 5540 levels.
The lead indicators show positive bias. The RSI—Relative Strength Index on the Daily Charts is 31.7156 and it does not show any failure swings. However, the NIFTY has set a new 14-day low but RSI has not and this is BULLISH DIVERGENCE. The Daily MACD remains bearish as it trades below its signal line.
On Candles, If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with NIFTY), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle's real body.
Overall, the Markets had been creating very huge open interests in last couple of session even though the FIIs were selling in the Cash Segment. This implies that heavy shorts were created in the system and at one point of time, a spate of short covering, usually equally sharp was imminent. This is further supported by stable global markets since last two sessions. There are fair chances that the Markets attempts to find bottom today and attempts a trend reversal.
All and all, with strong opening likely, we continue to advice to hold on to open positions. We also strictly recommend not attempting any fresh shorts at higher levels as such upside may continue. The Markets may see some volatility on account of expiry day but it would be important for the Markets to sustain and capitalize on the morning gains. Overall, positive outlook is advised as the bias remains positive.
Consulting Technical Analyst,
Wednesday, June 26, 2013
MARKET REPORT June 26, 2013
The Markets had a very volatile session yesterday as it opened on a flat note, showed good recovery and also pared its gains towards the end though it ended the day with modest gains. The markets opened on a flat note and after trading briefly in a capped range gave its day’s low of 5570.25 in the morning trade. However, in the late morning trade, the Markets perked up further. In the second half of the session, the Markets continued to show some strength. It went on to give the day’s high of 5666.25, rising some 95-odd points from its day’s low. However, in the last hour and half of the trade this recovery did not sustain as fresh shorts were built up again. This lead to paring of gains by the Market. It finally ended the day at 5609.10, posting a modest gain of 18.85 points or 0.34% while forming a higher top and similar bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today’s analysis remains more or less similar again as the Markets consolidated yesterday. Today, we enter the penultimate day of expiry of current derivative series and the session would continue to remain dominated with rollover centric activities. Expect the Markets to open on a modestly positive note and look for directions. The intraday trajectory would be crucial and the Markets will have to trade above its pattern support to avoid any further weakness.
For today, the levels of 5650 and 5680 shall continue to act as immediate resistance on the Charts. The Supports come in at 5570 and 5545 levels.
The lead indicators continue to remain neutral to mildly bullish. The RSI—Relative Strength Index on the Daily Chart is 32.7164 and it is neutral as it shows no failure swings or any kind of bullish or bearish divergence. The Daily MACD continues to remain bearish as it trades below its signal line.
On the derivative front, NIFTY futures have continued to add over 8.5 lakh shares in Total Open Interest as it showed heavy rollover activities and also creation of fresh shorts. Similar trend was observed in Stock Futures an Bank Nifty as well.
Having said this, since we are into expiry days, there are chances that Markets continue to remain volatile as we saw yesterday. However, so long as it continues to trade above its pattern support that exists in form of Double Bottom, the stability is expected to exist in the broader markets. The intraday trajectory would continue to remain critically important.
Overall, the Markets are expected to open modestly positive and trade in a range. There are all chances that it remains volatile due to rollover centric activities. However due to huge amounts of shorts that exist in the system, we continue to advice on similar lines. No shorts should be initiated and any dips should be used to make very selective purchases as the existing shorts may act as support anytime at these levels. Also, if required, liquidity should be preserved to maintain existing positions. Overall, positive caution is advised.
Consulting Technical Analyst,
Tuesday, June 25, 2013
MARKET REPORT June 25, 2013
The QE concerns continued to take its toll on global markets and India was no exception to that either as the Markets continued its slide to end the day with losses. The Markets opened on a negative note following global weakness and continued to remain negative throughout the session. After opening on a negative note, the Markets traded with capped losses in the first half of the session. The weakness intensified in the second half as the Markets drifted further down. It went on to give the day’s low of 5566.25 towards the end of the session. However, the Markets saw some recovery from those levels towards the end and it finally ended the day at 5590.25, posting a net loss of 77.40 points or 1.37%.
We are likely to see some respite from the weakness that we have been seeing since last couple of days. This is because of two reasons, First, the global Markets are trading steady and our Markets stands oversold with the lead indicators showing resilience at these levels. HOWEVER, it is important to note that the reason being the adjustments in the Markets across the globe, there are times that the Markets defies the technicals. However, expect a positive opening today and the Markets are expected to give a pullback, at least in the initial session.
For today, the levels of 5640 and 5685 are immediate resistance on the daily charts. The supports come in at 5535 levels in form of a major pattern support in form of Double Bottom. Following that, the next support come in at 5490 levels.
The lead indicators show signs of resilience again and may aid to a possible pullback. The RSI—Relative Strength Index on the Daily Chart is 30.8440 and this makes the Markets almost oversold. It does not show any failure swings but the NIFTY has made a new 14-day low and the RSI has not and this is certainly a BULLISH DIVERGENCE. The Daily MACD continues to remain bearish as it trades below its signal line.
On the Derivative front, NIFTY Futures have added over 17 lakh shares in total Open Interest. This is further supported by figures that the FIIs, despite remaining net sellers in the Cash Markets, have remained net buyers in the F&O segment for over 1550 crores. This implies that another huge chunk of shorts have been created in the Markets which is now likely to lend support at these levels.
Having said this, it is important to understand that this is the expiry week for the current derivative series. So, the session would surely remain dominated with rollover activities. Further to this, as mentioned earlier, Markets across globe are adjusting to a major external apprehension and therefore, there would be times when Markets will continue to defy the technical readings. However, they certainly point out to overall likelihood in the Markets.
Overall, even with a slightest negative trade, the Markets shall trade OVERSOLD. Further, it is very near to a important pattern support and with such huge amount of shorts existing in the system, we continue to sound caution and very strongly advice to refrain from creating shorts in such Markets condition as Markets may see a sharp pullback any time, even if it continue to remain in overall downtrend. It is very strongly advised to refrain from shorts and maintain liquidity to protect current positions. Even selective purchases can be made taking advantage of lower levels. However, very selective approach with caution is advised for today.
Consulting Technical Analyst,