MARKET REPORT
October 04, 2013
Though the pattern analysis and the derivatives data
suggested otherwise, the Markets had a very buoyant session yesterday and it
ended the day with robust gains after moving past both of its 100 and 200DMA.
The Markets opened on a positive note and after trading positive in a capped
range in the early morning trade, the Markets perked up further. The Markets
saw a spike in the late afternoon trade and thereafter kept gradually and
steadily making new intraday highs. It gave its intraday high of 5917.60
towards the end of the session. It finally ended the day at 5909.70, posting a
robust gain of 129.65 points or 2.24% while forming a sharply higher top and
higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, we are likely to see a modestly negative to flat
opening in the Markets. The Markets are likely to take some breather after a
robust rally yesterday and we might see the Markets consolidating or taking a
minor profit taking. The resistances of both the moving averages, i.e. 200DMA
and 100DMA which were resistances would act as support in case of any downside
in the Markets.
For today, the levels of 5925 and 5960 would act as
immediate resistance on the Daily Charts. The supports exist at 5840 and 5805
levels.
The RSI—Relative Strength Index on the Daily Chart is
56.5665 and it continues to remain neutral as it shows no bullish or bearish
divergence or any kind of failure swing. The Daily MACD too continue to remain
bearish as it trades below its signal line.
On the derivative front, NIFTY October futures have added
over 10.09 lakh shares or 6.18% in Open Interest. This is certainly a positive
indication as this indicates creation of fresh long positions in the Markets.
This also very clearly suggests that the rally that we saw yesterday has not be
due to mere short covering.
Given the above reading, and taking the lead indicators into
account, the Markets are now preparing stage for a upward movement but before
that, they are equally likely to consolidate around these levels. The Markets
would see a decisive upward move once its moves past the levels of 5940. If it
moves past this level, it can touch 6125 as well. However, before this happens,
there are chances that the Markets consolidate with 200-DMA acting a support
and keeping itself into a broad trading range.
All and all, from the reading above, it is advised not to
attempt to create any short positions in the Markets. Even if the Markets consolidate,
they would do so with a positive bias and even in time of consolidation or
minor profit taking at higher levels, selective out performance would continue.
Any consolidation or any profit taking should be used to make selective
purchases. Profits too need to be protected at higher levels. Overall, cautiously
positive outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
