MARKET REPORT
July 18, 2013
The Markets had a quite volatile session yesterday as it
moved both ways in the second half of
the session to ultimately end with modest gains. The Markets opened on a
modestly positive note and in the morning trade went on to give its intraday
high of 5989.80. The Markets did not made much headway as such as it continued
to move in sideways trajectory and with capped gains. However, in the second
half the Markets saw some sudden paring of gains. It not only came off its
day’s highs but also dip into the red. It went on to give the day’s low of
5925.75, coming of almost 70-odd points from its day’s high. However, in the last
hour of the trade, the Markets saw sharp recovery again as it not only
recovered from its day’s lows but also went back into the green. It finally
ended the day at 5973.30, posting a modest gain of 18.05 points or 0.30% while
forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
For today, expect the Markets to open on a modestly positive
note and continue with the up move. There has been a disruption in the up move
that the Markets were witnessing due to RBI Announcements but more or less it
should continue as there is no structural breach on the Charts. The Intraday
trajectory would be important the Markets would require to maintain the levels
above its 50-DMA.
For today, the levels of 5995 and 6035 would act as
immediate resistance on the Charts. The supports come in at 5925 and 5913 which
is the 50-DMA of the Markets.
The lead indicators continue to remain firmly in place. The
RSI—Relative Strength Index on the Daily Chart is 56.9334 and it is neutral as
it shows no bullish or bearish divergence or failure swings . The Daily MACD
too remains bullish as it trades above its signal line.
On the derivative front, NIFTY Futures have continued to add
nominal open interest. This is minor positive sign as there has been no
shedding of open interest reported. However, fresh longs still remains to get
built up which shall give impetus to further up move.
Having said this, there are some important things to note.
One, there has been no structural breach on the technical charts despite
disruption of the up move caused by RBI Announcement on MSF front. Secondly,
the Markets have not shown too much of unwinding yesterday. It would be
important to see that some fresh longs get build up and the markets remain
above the levels of 50-DMA.
All and all, the Markets would see a modestly positive start
and continue with its yesterday’s pullback, at least in the initial trade.
There will be no structural breach on the Charts so long as the Markets trade
above the levels of 50-DMA. However, volatility may remain. In such case,
profits on long positions should be protected at higher levels but shorts
should still be strictly avoided.
Downticks should be used to make selective purchases. Overall, cautious
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
