MARKET REPORT August 13, 2013
The Markets had a relatively better session yesterday as it
ended the day with decent gains even after coming off its highs in the last
hour of the trade. The markets opened on a modestly positive note but in the
morning trade pared its opening gains to trade briefly into negative while
giving its intraday low of 5557.10. However, post this level, the Markets
transformed itself into rising trajectory and kept making new highs gradually.
It went on to give the day’s high of 5644.10 in the late afternoon trade.
However, the Markets saw some paring of gains from those levels. It retraced a
bit and finally ended the day at 5612.40, posting a gain of 46.75 points or
0.84% while forming a higher top and higher bottom on the Daily High Low
Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a positive note and
continue with its up move at least in the initial trade. The Markets are
expected to maintain positive figures in the initial trade and look for
directions later. There has been little lack of conviction in the markets while
moving on both side and therefore the intraday trajectory that the Markets form
post opening would be critical for the day’s trend.
For today, the levels of 5650 and 5695 would act as
immediate resistance on the charts. The supports come in at 5585 and 5550
levels.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 37.3910 and it is neutral as it shows no
bullish or bearish divergence or failure swings. The Daily MACD continues to
trade below its signal line.
On the derivative front, the NIFTY August futures have shed
over 12.01 lakh shares or 7.59% in Open Interest. This is a negative reading as
it suggests that the rally that we saw in the morning trade has been more on
account of short covering rather than fresh buying. This getting replaced with
fresh buys would be critically important for the Markets.
Given the above reading, it is clear that the Markets have
taken support, as of now, on the trend line and the pattern support. However,
it has clearly lacked the conviction while moving up as well. There is clear
lack of consensus in the Markets that we are seeing right now and this can keep
the Markets fairly in a range in coming days. We need up moves with conviction
which also adds open interests across the board while moving up and this is not
happening.
All and all, flat to mildly positive opening likely but it
would be important for the Markets to sustain whatever opening gains that it
has and builds up further from there. No aggressive buying should be done until
the Markets moves past the levels of 5650 comprehensively. Shorts too should be
avoided. Selective out performance would continue. Overall, it is advised to
remain extremely selective while building fresh positions and instead adequate
liquidity should be maintained. Cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
