MARKET TREND FOR TODAY
May 17, 2013
Though the Markets continued to inch up further, it spent
the entire session yesterday in a extremely narrow band as it ended the day
with moderate gains. The Markets displayed a 20-odd points intraday band as it
consolidated after opening on the positive note and showing all signs of weariness
at the higher levels. The Markets opened on a moderately positive note and gave
its intraday high of 6187.30 in the first hour of the trade. Thereafter, the
Markets headed nowhere as it spent the rest of the session moving sideways in the
20-odd point narrow band. This continued until the end as the Markets finally
ended the day at 6169.30, posting a modest gain of 23.15 points or 0.38% while continuing
to form a higher top and higher bottom on the Daily High Low Charts.
Today’s analysis remains more or less in line with
yesterday. The markets are showing a clear signs of weariness at higher levels.
Expect the Markets to open on a flat note and look for directions. The chances
remains high that the Markets continues to see consolidation or even minor
correction as suggested clearly on the
technical charts by the lead indicators.
For today, the levels of 6190 and 6220 shall act as
immediate resistance on the Charts. The supports come in much lower at 6105 and
6075 levels.
The lead indicators clearly show weariness on the Charts. It
indicates that the Markets are again overdue for a correction. The RSI—Relative
Strength Index on the Daily Chart is 67.6644 and it does not show any failure
swings. However, NIFTY has made a new 14-day high but the RSI has not and this is
clear BEARISH DIVERGENCE. The Daily MACD still continues to trade above its
signal line but is moving towards a negative crossover.
On the derivative front, NIFTY May futures have continued to
show addition in Open Interest as it added 5.14 lakh shares or 2.05% in Open
Interest.
Having said this, we once again reiterate that the technical
lead Daily Charts very clearly show the Markets likely to lose steam in
immediate short term. It clearly indicates that weariness is seen at higher
levels and all this point towards imminent correction from higher levels. Its
another thing that the liquidity can still push the Markets higher but any such
up move shall mean high chances of equal sharp correction from higher levels.
Rising driving by liquidity is another thing, but such rise can mean extremely
risky and unhealthy for a retail trader and Markets as a whole.
All and all, we continue with our analysis on similar lines
like yesterday. We reiterate that the Markets continue to show sharp negative /
bearish divergence on the Daily Charts and under such circumstances, no aggressive
purchases should be made even if the Markets continue to see some up move. The
Markets are likely to remain in arrange and also might witness correction at higher levels. While
avoiding any reckless purchases just because the Markets are showing up move,
any upside should be utilized to book profits on the long side. Overall,
continue to sound caution as the undertone suggests impending correction.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
