MARKET TREND FOR TODAY
February 08, 2013
Disappointing session yet again for the Markets yesterday as
it continued to moderately correct and consolidate within the broad trading range,
though on expected lines to end the day with moderate losses. The markets
opened on a modestly negative note but the morning trade saw some positive t
rend as the Markets moved into the green. In the late morning trade, it perked
up further to give the day’s high of 5978.50. However, after that, the Markets
again transformed themselves into falling trajectory and gradually pared all of
its gains to dip into the negative. It made a feeble attempt to recover but
again pared that attempt too as it gave day’s low of 5927.60. It finally ended
the day at 5938.80, posting a moderate loss of 20.40 points or 0.34% while
forming a lower top and lower bottom on the Daily High Low Charts.
Today would be an important session for the Markets. The
Markets have been precariously hanging on the pattern supports of 5950-5940
levels which is the lower end of the broad trading range. The Markets 50-DMA
also stands at 5957 and the Markets have ended a notch below it. Today, a flat
opening is expected in the Markets but it would be very critically important to
see if the Markets maintain the levels above 5940 to avoid any further weakness.
For today, the levels 5940-5925 shall act as important
supports. If this supports are breached,
then another support would come in at 5880 levels.
So far as lead indicators goes, the RSI—Relative Strength Index on the Daily
Chart is 41.8812 and it has reached its lowest value in last 14-days which is
bearish. Though it does not show any negative divergence. The Daily MACD
continues to trade below its signal line.
On the derivative front, NIFTY has shed 75,650 shares or
nominal 0.59% in Open Interest which shows mild offloading of long positions.
The NIFTY PCR stands at 0.97 as against 0.95.
Having said this, there is something important to note here.
The Markets have been mildly correcting over last couple of days but it has not
been breaking down as such. The main reason for this is the one of the major
external event, i.e. Union Budget which comes up later this month. Normally
markets rally before the budget but this time, they might not rally, but they
are not breaking down either.
This is one of the major reason that we are seeing some shorts
being created but no major selling happening and this is keeping the Markets
directionless. Normally there is a possibility that we may see a rally prior to
the budget, which takes it to around its resistance levels again and then the
Markets takes a serious directional call post the Budget.
All and all, there are bright chances that we may continue
to see the Markets consolidating again. Even if it momentarily breaches the
supports, the weakness too should not remain but longer and we might see
improvement from lower levels. Even at this stage, shorts should b e strictly
avoided. Cautious outlook with very selective approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
