MARKET REPORT October
11, 2013
Yesterday was a day of positive consolidation in the Markets
as the Markets opened modestly positive but traded volatile on the both sides
while finally ended with minor gains. The Markets opened on a modestly positive
note and after trading positive in a very narrow and capped range, it dipped
into the red to give the day’s low of 5979.80. Post this formation of low, the
Markets gradually crawled back into the green and went on to give day’s high of
6033.95. The markets pared this recovery as well to trade flat again in the
late afternoon trade. It saw some recovery towards the end again and it finally
ended the day at 6020.95, posting a minor gain of 13.50 points or 0.22% while
forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Taking cue from the positive and strong global Markets, our
markets as well are likely to open on a stronger. The Markets would be affected
by the Infosys results today and also if it follows global cues and opens
strong, it would open near the temporary top that it had formed and it would be
critically important to see if the Markets sustain the opening strength and
capitalize on the strong opening.
For today, the levels of 6075 and 6130 are immediate
resistance levels on the Charts. Supports exist much lower at 5965 and 5910
levels.
There are signs of weariness on the lead indicators. The RSI—Relative
Strength Index on the Daily Chart is 61.9990 and it shows no failure swing.
However, NIFTY has set a new 14-day high while RSI has not and this is BEARISH
DIVERGENCE. The Daily MACD is bullish as it trades above its signal line.
On the derivative front, NIFTY October futures have added
5.99 lakh shares or 3.69% in open interest. This shows that in yesterday’s
consolidation no major unwinding was reported and some moderate buying was
seen.
Given the above reading, the Markets would open on a
critical juncture with two possibilities. First, in case of any bad outcome of
Infosys results, it may give knee jerk reactions and may not open with expected
strength. On the other hand, if the Markets follows global cues and opens
strong, it would open near its key resistance levels it would be critically
important to see if it sustain the opening levels. With the bearish divergence
on the RSI, some signs of weariness and tiredness is already present in the
Markets.
All and all, with this in view, opening levels and the
trajectory that the Markets form post opening would be critically important.
Even with the positive and stronger opening, we would advice remaining ultra
selective in creating fresh positions. Profits in existing positions should be
very vigilantly protected even if means booking profit bit early. Overall,
cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
