MARKET REPORT
October 01, 2013
The correction in the Markets continued yesterday quite on
expected lines as it opened modestly weak but continued with its slide to end
yet another day with losses. The Markets opened lower and never really
attempted to have any pullback throughout the session as it continued to slide
gradually. In the last thirty minutes of the trade, the Markets saw some more
pressure coming in as it went on to test its 50-DMA, precisely as expected in
our yesterday’s edition of Daily Market Trend Guide as it gave its intraday low
of 5718.50. It hovered around those levels a bit and it finally ended the day
at 5735.30, while forming a sharply lower top and lower bottom on the Daily
High Low Charts.
MARKET TREND FOR TODAY
After paring of almost 200-odd points in two sessions, we
are likely to see some respite from the weakness that the Markets are
exhibiting and see some positive ticks today. Expect the Markets to open on a
modestly positive note and look for directions.
The supports of 200DMA and the 100DMA that the Markets broke on the
downside would act as resistance and this may kept he Markets range bound.
For today, the levels of 5810 and 5840 would act as
immediate resistance on the Daily charts. The support exist at 5709, which is
the 50-DMA for the Markets today. If the Markets breach this level on the
downside, we will see some more weakness creeping in.
The RSI—Relative Strength Index on the Daily Chart is 47.91
and it has reached its lowest value in last 14-days which is bearish. The Daily
MACD, as expected from last two days has reported a negative crossover and it
now trades below its signal line which too is a bearish indicator.
On the derivative front, NIFTY October futures have went on
to shed yet another 10.44 lakh shares or 5.82% in Open Interest. This is
further clear indicator that there was a clear offloading of long positions and
no shorts were seen being created.
Taking into account pattern analysis, we may see some
support coming in near the 50-DMA levels but at the same time, it is likely
that the Market may take only temporary support at these levels. This is
because if F&O data is relied upon, it clearly indicates that some more
downside is likely in the Markets. We
gave a truncated week as tomorrow is a trading holiday on account of Mahatma
Gandhi Jayanti.
All and all, there are chances that the Markets may see
positive opening today in the initial trade but the weakness might creep in at
higher levels. Alternatively, it is also likely that the Markets remains in a
capped range for some time before its takes further directional course. In both
of these circumstances, we continue to advice to avoid shorts at these levels
and use the downside in making selective purchases while vigilantly protecting
any existing profits. Caution with mild
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
