MARKET REPORT
July 11, 2013
What it seemed to be a stable session with some modest gains
for the most part of the day, fizzled out in the second half as the Markets
gave up to end the day with modest losses. The Markets opened on a modestly
positive note in line with its Asian peers and gave its intraday high of
5879.35 in the very early minutes of the trade. The Markets came of a bit after that and continued to trade in 20-odd
points capped range until half of the session moving in and out of negative
territory. However, the Markets saw some pressure building in last one and half
hour of the trade as the Markets suddenly pared its opening modest gains. It
dipped into the negative again and went on to give the day’s low of 5802.85. It
ended the day at 5816.70 after a modest recovery with a net loss of 42.30
points or 0.72% while forming a higher top and lower bottom on the Daily High
Low Charts.
MARKET TREND FOR TODAY
Today, expect a strong and gap up opening in the Markets
today and expect the Markets to open and trade near the upper levels of the
trading range that it has been trading in. The opening levels are expected to
be around its 50-DMA of 5917 today. It would be important to see the behaviour of
the Markets post opening and the sustenance of the opening gains would be crucial
to continue with trend reversal attempt after recent lows.
For today, the levels of 5915 and 5940 shall act as
immediate resistance on the Daily Charts. The supports come in at 5835 and 5780
at Close levels.
The lead indicators continue to remain firmly in place. The
RSI—Relative Strength Index on the Daily Chart is 49.66 and it is neutral as it
shows no bullish or bearish divergences or any failure swings. The Daily MACD
is bullish as it continues to trade above its signal line.
On the derivative front, NIFTY July futures have added
78,450 shares or nominal 0.51% in Open Interest. This if we look form one
angle, suggest that though no major shorts were created yesterday, no long
unwinding was done either. This is more of a neutral reading on the derivative
front.
Overall, as mentioned in our yesterday’s edition of Daily
Market Trend Guide, there is severe positive consolidation going on in the
Markets after it pulled back over 300-odd points after making recent lows. This
has made the Markets healthier and has set the stage of confirmation of
successful trend reversal going ahead. After today’s strong opening, the
Markets will have to sustain at those levels without paring much gain. It would
need to capitalize on the strong opening that it is set to get. It will then
set the stage of successful trend reversal going ahead.
All and all, with the strong and gap up opening expected,
the Markets are moving towards breaking out of the broad trading range that it
has been trading after the pullback from recent lows. Creating shorts, even at
higher levels is not advised as the Markets prepares itself for possible trend
reversal confirmation. Any profit at higher levels should be vigilantly
protected and fresh purchases may be made selectively on any dips. Overall,
positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
