MARKET REPORT
July 09, 2013
So far as yesterday’s session goes, the Markets more or less
traded in line with what was analysed in our yesterday’s edition of the Daily
Market Trend Guide. The Markets saw lower opening in line with global weakness
but came off its lows as the session progressed to close a notch below its
200-DMA. The Markets opened with a modest gap down along with its Asian peers
but weakened further in the morning trade to give the day’s low of 5775.55.
However, after this, the markets transformed itself into rising trajectory as
it attempted to recover from its opening lows. The Markets kept recovering
gradually from its lows during the day and managed to recover some half of its
losses. It finally ended the day at 5811.55, still posting a net loss of 56.35
points or 0.96% while forming a lower top and lower bottom on the Daily High
Low Charts.
MARKET TREND FOR TODAY
The Markets have closed a notch below its 200-DMA which is
5832.54 today. Expect the Markets to open on a modestly positive note and look
for directions. The opening of the Markets would be around its 200-DMA or bit
higher and it would be very critically important to see if the Markets remains
above this level after opening. Intraday trajectory would be very important
today and the behaviour of the Markets vis-à-vis the levels of 200-DMA would be
critically important.
For today, the levels of 5832 and 5880 are immediate resistance
levels on the Charts. The supports come in at 5790 and 5760 levels.
The RSI—Relative Strength Index on the Daily Charts is
49.4920 and it shows no bullish or bearish divergence or any failure swings and
is therefore neutral. The Daily MACD continues to remain bullish as it trades
above its signal line.
On the derivative front, the NIFTY July futures have shed
over 7.96 lakh shares or 5.09% in Open Interest. This is little negative as we
see that yesterday’s recovery from the day’s lows have come more from short
covering than from fresh buying and there has been net unwinding of positions
reported in the derivative segment. It would be important to see that with
today’s positive move initially, these are replaced with fresh longs or not.
The overall observation is that the Markets have been
consolidating in a range of 70-80-odd points in between its 50-DMA on the upper
side and the 100 and 200 on the down
side. And during such sessions, for the most of the time, the Markets have
added in Open Interest and have recovered from its close below its 200-DMAs
twice in the past. Today also, with its current closing a notch below 200-DMA,
it would be important to see that it moves past this levels after opening and
sustains above that level to avoid any further weakness creeping in.
All and all, the view is clear for the Markets today. It has
to move past the levels of 200-DMA which is 5832 and trade above those levels
if it has to avoid any further weakness creeping in. The chances of Markets
doing this are higher as such. However, for this, the intraday trajectory and
the behaviour of the Markets vis-à-vis these levels would be important. While
avoiding shorts, trading are advised to remain light on overall positions until
directional trend gets clear. Continuance of positive caution is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
