MARKET TREND FOR TODAY October 17, 2012
Completely in line of the analysis carried out in our
yesterday’s edition of Daily Market Trend Guide, the Markets fizzled out and
continued with the correction in the second half of the session after a bullish
start to the session. The Markets opened on a positive note and gave its
intraday high of 5714 in the early minutes of the trade. The Markets, though
remained positive in the morning session, traded in absolutely capped range.
Thereafter, in the second half, after attempting a rise, the Markets suddenly
saw selling pressure creeping. It not only dipped into the red, but went on to
give the day’s low of 5635.60. The levels of 5630 held out as support but the
Markets ended the day at 5648, still posting a net loss of 39.25 points or
0.69% forming a higher top and lower bottom on the Daily High Low charts.
Today, expect a positive opening in the Markets. Today’s
there would be a tussle between the domestic technical charts, F&O
statistics and pattern analysis which suggest continuation of the corrective
trend and positive global factors on the other
side which shall induce positive opening. The most critical factor would
be intraday trend that the Markets forms post opening and it would be crucial
to see if the Markets sustains its
positive opening and capitalizes on it.
The levels of
5700-5725 shall continue to act as immediate resistances and the levels
of 5630 shall continue to act as critical support.
The RSI—Relative Strength Index on the Daily Chart is
54.2604 and it has reached its lowest value in last 14-days which is bearish.
The Daily MACD continues to trade below its signal line.
On the Candles, an engulfing bearish line has
occurred. The engulfing bearish pattern is bearish during an
uptrend, which is the case with NIFTY and as a result of which Markets may see
continuing weakness.
Further to this, NIFTY Futures have continued to shed over 4
lakh shares in Open Interest. The NIFTY Futures have shed Open Interest for
five straight sessions in a row. Still further to this, most of the stock
futures have also reported shedding of Open Interest. All this signifies continuation
of long unwinding in the Markets.
However, on the other hand, we will see a decently positive
opening in the Markets. However, there are chances that the Markets may
struggle on the upside and may pare its opening gains. Any continuation of the
up move shall be short covering unless the Markets breach 5750 on the upside.
Until then, without getting carried away, continuing cautious outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
