MARKET TREND FOR TODAY
June 19, 2012
A step taken to keep the Repo Rate and CRR unchanged – which
is economically very much correct did not went well with the Markets which was unanimously
expecting cuts, as it ended the day with deep losses coming of violently from
its opening highs. The Markets opened positive and remained buoyant as it gave
it’s intraday high of 5199.68. This was against the high of 5200 mentioned by
us. It moved in that range until the RBI made announcement. It came off
violently from there and went on to give low of 5041.70, coming off more than
150 points from the day’s high. It ended the day at 5064.25, posting a cut of
74.80 points after coming off from its lows or 1.46%. It formed a higher top
and higher bottom on the Daily High Low Charts.
Today would be equally important session for the Markets.
The Markets have maintained the support of its 200-DMA at close levels. With
moderately positive opening today, it would be critically important for the
Markets to maintain the levels above of its 200-DMA, at least at close which is
5072.71 in order to avoid any further weakness from creeping in. The intraday
trajectory, would therefore, remain very much important.
For today, the levels of 5130 and 5200 ar the immediate
resistance on the Charts and the levels of 5072 and 5020 are immediate supports
at Close levels.
The lead indicators continue to remain in place with RSI—Relative
Strength Index on the Daily Chart at 53.2949 which is neutral as it shows no
negative divergence or a failure swing. The Daily MACD still continues to
remain bullish as it trades above its signal line.
Having said this, it is important to note that both NIFTY
and Stock Futures have added in Net Open Interest indicating creation of short
positions in the Markets. The NIFTY PCR stands at 1.43 as against 1.55.
Further to this, it is also important to note that we
remained dominated with the RBI event yesterday and remained underperformer
among the Asian Markets. Given this, we
are likely to see some decoupling today and we are likely to see some
stability returning to the Markets.
Also important to note is that RBI has taken a
economically-correct step and this is definitely likely to arrest the fall in
the markets after a short term knee-jerk reaction. The opportunity should be
used to take selective long positions and shorts should be strictly avoided.
Markets are still in broad range and there is no negative breach on the Charts
as of now. Cautious and mildly positive approach is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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