MARKET TREND FOR
TODAY August 13, 2012
The Markets had a very volatile session on Friday as it
opened lower, went further into the red, recovered from its day’s lows and
ended the day flat with very negligible losses. The Markets opened on a
moderately negative note. It traded in a capped range in the beginning and then
slipped further into the red as it gave its day’s low of 5294.10. However, in
the second half of the session, it saw some recovery as the Markets recovered
from its day’s lows and also went marginally into the green giving the day’s
high of 5330.10. It hovered in a capped range in the last hour of the trade and
finally ended the day at 5320.40, posting a very negligible loss of 2.55 points
or 0.05%. The Markets have formed a lower top and lower bottom on the Daily
High Low Charts.
Today, we can expect a fairly quiet start in the Markets.
The Markets are expected to see a very quiet and flat opening and shall look
for direction as they would continue to consolidate. Because of ongoing
consolidation, the intraday trajectory would be critically important to decide
the trend for today.
The levels of 5335 and 5355 shall act as immediate resistance
on the Charts and the levels of 5290 and 5255 would be immediate supports on
the Charts.
The RSI—Relative Strength Index on the Daily Charts is 61.1484
and it is neutral as it shows no negative divergence or failure swings. The
Daily MACD continues to trade above its signal line. The Weekly RSI is 56.3011
and it does not show any failure swing but the NIFTY has set a new 14-week low
but the RSI has not and this is BEARISH DIVERGENCE. The Weekly MACD however
continues to trade above its signal line.
Reading this along with the F&O statistics clearly
indicates that the consolidation activity is likely to continue and it can also
turn into minor correction. This also clearly indicates that no run-away rise
in the Markets is likely to be seen in this week and it also further indicates
that there are possibilities that the Markets may weaken further as the week
goes by.
All and all, the levels of 5377 have become a immediate top
for the Markets and fresh and sustainable up move can occur only if the Markets
moves past these levels. Until then, range bound and volatile movements shall
occur and bouts of profit taking would continue to be seen. While remaining
highly selective during this phase of the Markets, cautious approach should be
adopted today, and for the coming week if these technicals are to remain
constant.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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