MARKET REPORT
September 11. 2013
Markets witnessed on of the single largest gains on a single
day in recent times as it opened on a higher note and further strengthened to
end the day with very robust gains. The Markets saw a mildly gap up opening and
thereafter spent the entire session steadily giving higher and higher highs.
The Markets initially opened well above its 50-DMA mark and during the day, it
even moved past its 200-DMA levels of 5835.80. It moved past this level
significantly as it gave its intraday high of 5904.85 in the last hour of the
trade. The Markets maintained these gains in a convincing manner and it finally
ended the day at 5896.75 while posting a very strong and robust gains of
216.365 points or 3.81% while forming a very sharply higher top and higher
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets have risen nearly 800-odd points since the lows
it made on 28th August , and nearly 600-odd points in straight 4-day
rally. Given this reading, it is extremely likely that the Markets see some
consolidation or minor profit taking from higher levels. Today, expect the
Markets to open on a flat to mildly negative note and correct. Intraday
trajectory would be important to determine if the Markets are consolidating or
correcting.
Today, the levels of 5925 and 5940 are immediate resistance
levels. The support exist in form of 200-DMA which the Markets moved past
yesterday. Levels of 5835 and 5810 shall act as immediate supports.
The lead indicators continue to remain buoyant. The RSI—Relative
Strength Index on the Daily Chart is 62.6642 and it has reached its highest
value in last 14-days which is bullish. It does not show any bullish or bearish
divergence. The Daily MACD continue to remain bullish as it trades above its
signal line.
On the derivative front, the NIFTY September futures have
added over 20.04 lakh shares in or over 11.28% in Open Interest. This is
certainly a positive factor and shows that the rally that we saw yesterday was
on account of pure buying and not just on short covering.
Given the reading, it
is very clear that we have seen genuine buying from lower levels and there has
been steady inflows in last 4-5 sessions that has fuelled this rally. It is
very clear that there has been short covering to some extent but that has got
replaced multi fold with fresh long positions. The lead indicators too remain
intact.
All and all, the trend in the Markets remain intact. The
only fact of one way rise of over 600-odd points is something that can cause
the Markets to either consolidate of correct a bit. Even if it consolidates, it
shall keep the session volatile and volatility shall refuse to away. It is also
likely that the Markets consolidates above its 100 and 200-DMA levels and
spends a day or two in a capped range. Given this scenario, it is extremely
important to protect long profits at higher levels while fresh purchases should
be made very selectively. Cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
