MARKET TREND FOR
TODAY
August 31, 2012
The session yesterday on the expiry day of the August
Derivative Series remained very volatile as the Markets opened on a negative
note and traded in a capped range in volatile manner and saw a sharp bout of
short covering towards the end of the session to end the day with modest gains.
The Markets opened modestly negative and gave its intraday low of 5255.05 in
the early minutes of the trade. This was against the support levels of 5251
mentioned by us. The Markets thereafter traded in a capped range, though
remained very much volatile driven by rollovers. In the last half hour of the
trade, the Markets saw a sharp rise on back of short covering and gave its
intraday high of 5342.80. It finally ended the day at 5315.75, little off from
its highs and ended the day with modest gains of 27.25 points or 0.52% while
forming a lower top and lower bottom on the Daily High Low Charts.
Today, expect the Markets again to open on a moderately
lower note and trade directionless in the initial trade. The Markets have held
on to their support of 50-DMA which is 5255 and this shall continue to act as
support and thus intraday trajectory would continue to play important part in
deciding the trend for today.
The levels of 5255 shall continue to act as important
support for the Markets today, being the 50-DMA. The weakness shall occur if
the Markets dips below that, but until then, it is expected to remain in a
range and equally volatile.
The RSI—Relative Strength Index on the Daily Charts is 51.3666
and is neutral as it shows no failure swing or any bullish/bearish divergence.
The Daily MACD continues to trade below its signal line.
The NIFTY has reported less rollovers by 20% as compared to
previous month, but has started the new series with PCR of 0.92%.
The Markets have another reason to remain volatile today as
the Q1 GDP numbers are expected today and they are expected to remain dismal at
5.3-5.2%. However, any positive trigger will infuse momentum in the Markets.
Also, FOMC meet would be watched but nothing is expected out of it as such with
no material announcements coming in and this can lead to weaker sentiments in
the global markets.
Having said this, so far as we are concerned, the Markets
are expected to remain in a range, and also bit volatile and the levels of 5255
is expected to hold out as support. Further weakness will creep in only if it
breaches these levels. Until this happens, volatility will stay and selective
performance would be seen. However, Markets shall be devoid of any clear
direction. It is advised to take fresh positions, but on a selective basis
without too much of leveraging. Overall, cautious outlook is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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