MARKET REPORT
July 29, 2013
The Markets had a little disappointing session, especially
in the second half as it once a gain pared its intraday gains to end the day
with modest losses though while adding Open Interest in the process. The
Markets opened on a modestly positive note and gave its intraday high of
5944.50 in the very early minutes of the trade. The Markets thereafter transformed
itself into falling trajectory and went on to slide gradually to pare its
opening gains and dip into the negative. The Markets went on to give the day’s
low of 5869.50 in the last hour of the trade. However, some recovery was seen
towards the end as the Markets recovered from its loss to trade flat. However,
it ended the day at 5886.20 posting a net loss of 21.30 points or 0.36% while
continuing to form a lower top and lower bottom on the Daily High Low Charts./
MARKET TREND FOR TODAY
Today, expect the Markets to open on a absolutely flat note
and look for directions. Though the Markets have ended below its 50-DMA, but it
is still within its filters and trades above its 100 and 200 DMA and therefore,
there is no structural breach on the Charts as yet. It would be important for
the Markets to maintain levels above the 200-DMA which is 5852 and therefore
the intraday trajectory would continue to remain critically important for today
as well.
For today, the levels of 5900 and 5955 would pose as
immediate resistance on the Charts. The important support come in at 5852 in
form of 200-DMA at Close levels.
The lead indicators show some weakness for the immediate
short term. The RSI—Relative Strength
Index on the Daily Charts is 47.6897 and it has reached its lowest value in
last 14-days which is bearish. The RSI has made a new 14-day low whereas NIFTY
has not yet. This is also bearish divergence. The Daily MACD too has reported a
negative crossover but is likely to reverse it in case of positive closing
today. On the Weekly Charts, the RSI is 51.1017 and is neutral as it shows no
negative divergence or failure swings. The Weekly MACD remains bearish as it
trades below its signal line.
On the derivative front, NIFTY August futures have added a
nominal of 9850 shares or 0.05% in Open Interest. The positive factor in this
reading is that while on its way down, the NIFTY has not pared any open
interest and no significant long unwinding has been seen or reported at all.
Having said this, there are little contradictory reading on
the technical charts and the F&O data. The lead indicators on the charts
exhibit little weakness in the immediate short term and the F&O data show
very clear and significant addition of open interest in the NIFTY as well as
Stock Futures which have added over 7 Crore shares in Friday’s session alone.
This suggests that even if we see momentary weakness in the near term, the overall downside would
be very limited.
All and all, as mentioned earlier, the Markets continue to
trade above its 200-DMA as of now and until this levels and its filters are
maintained at Close levels, there would be no structural breach on the Charts.
Given this scenario, though aggressive positions on either side should be
avoided, very very selective purchase should be made as stock specific action
and selective out performance would be seen. Overall, continuance of caution
with mild optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
