MARKET REPORT
September 13, 2013
The Markets took a breather yesterday, quite on expected
lines as it snapped it 4-day unabated rally to end the day with modest losses.
The Markets opened on a positive note but as expected, pared its opening gains
quickly after giving the day’s high of 5932. The Markets soon dipped into the
red and remained negative for the entire session after transforming itself in
to downward falling trajectory. The losses deepened in the second half of the
session as the Markets went on to give the day’s low of 5815.80. However it saw
some minor recovery towards the end but still ended the day at 5850.70, posting
net loss of 62.45 points or 1.06% while forming a higher top but lower bottom
on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a modestly negative
note and it is likely that the corrective activity continues at least in the
initial session. The Markets have closed a notch above 200-DMA which is 5838.85
and any opening below this would cause further weakness in the Markets. The
opening levels of the Markets and its behaviour vis-à-vis this 200-DMA and
100DMA levels would dictate the trend for today.
For today, the levels of 5880 and 5920 would act as
immediate resistance levels for the Markets. The supports exists at 5802 and
5775 levels on the downside.
The lead indicators remain neutral. The RSI—Relative Strength
Index on the Daily Chart is 59.9808 and it is neutral as it shows no bullish or
bearish divergence or any kind of failure swings. The Daily MACD continues to
trade above its signal line. On the Candles, An engulfing bearish line occurred (where
a black candle's real body completely contains the previous white candle's real
body). The engulfing bearish
pattern is bearish during an uptrend (which appears to be the case with
NIFTY). It then signifies that the
momentum may be shifting from the bulls to the bears.
On the derivative front, NIFTY September futures has continue to
shed 1.73 lakh shares or 0.91% in Open Interest. Though major offloading was
not seen yesterday, but at the same time, no major shorts were seen being
created as well.
Overall, if the Markets opens and drifts below the 200-DMA levels,
it is likely that further weakness creeps in to it. It would be very necessary
for the Markets to trade above the levels of 200-DMA in order to just
consolidate and not weaken further. As mentioned earlier, the opening levels
and the intraday trajectory it forms vis-à-vis the levels of 200-DMA would
determine if the Markets are just consolidating or it is continuing to see some
correction.
All and all, the final reading remains on similar lines like
yesterday. No fresh long positions should be taken until the Markets moves past
the levels of 5930-5935 and until this happens it is likely to see a range
bound consolidation with greater chances of weakness if it drifts below
200-DMA. Until this directional trend gets clear, any profits should be
vigilantly protected. Overall, continuance of cautious outlook is advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
