MARKET REPORT June 18, 2013
The Markets had a volatile session yesterday and it reacted
to RBI Policy announcements exactly as analysed in our yesterday’s edition of
Daily Market Trend Guide. The Markets opened modestly negative note and traded
with capped losses in the morning trade. It reacted bit violently as expected
to the RBI Policy Announcements wherein the RBI kept the key rates unchanged on
expected lines. However, reacting to this, it gave its intraday low of 5770.25
in the late morning trade. However, after bottoming out near these levels, the
Markets rebounded from its day’s lows. It not only recouped all of its losses
to trade flat, but also went on to trade in the positive territory while
gradually making new highs. It recovered almost 80-odd points from its day’s
low as it gave its intraday high of 5854.90 in the last minutes of the trade.
The Markets hovered around those levels and finally ended the day at 5850.05,
posting a net gain of 41.65 points or 0.72% while continuing to form a higher
top higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets are again likely to open flat and look for
directions. It is in close vicinity of its 100-DMA on the upside and the
200-DMA on the down and the technical and pattern analysis is likely to keep
the Markets in a capped range making it range bound. The intraday trajectory
would be critical to determine the trend for the day as selective out
performance cannot be ruled out.
The levels of 5879 which is the 100-DMA and the levels of
5902 which is the 50-DMA of the Markets are likely to pose immediate resistance
to the Markets. The supports come in at 200-DMA
which is 5802.
The RSI—Relative Strength Index on the Daily Chart is 44.6762
and it is neutral as it shows no bullish or bearish divergence or failure
swings. The Daily MACD remains bearish in the immediate short term as it trades
below its signal line.
On the derivative front, NIFTY June futures have added over
14 lakh shares or 8.95% in Open Interest. This is a very positive indicator and
it certainly shows that the recovery that we saw from the yesterday’s lows was
not because of mere short covering but was also due to fresh longs that were
seen added.
Given this reading of the technical charts, pattern analysis
read along with the F&O data, the bias certainly remains on the upside.
However, the Markets will have to move past the levels of its 50 and 100DMA and
trade above 5905 in order to have a fresh sustainable rally. Until this happens,
the Markets will find itself in a trading range and the sessions would be
capped and little volatile. But as mentioned just above, the bias certainly
remains on the upside.
All and all, given the positive cross over of the 50 and
100-DMA on the Daily Charts, even with any short term weakness or any capped /
ranged session, the possibility of the Markets moving past the levels of 5900
remains bright. It is recommended to avoid any kind of fresh shorts. Any temporary
downside should be used to make selective purchases as even in range bound
trade, selective out performances are likely to be seen. Overall cautious, but
positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
