MARKET TREND FOR
TODAY
September 03, 2012
The Markets began its new derivative series on a weaker note
as it opened negative and after showing some resilience for some time, drifted
lower to end the day with losses. The Markets opened on a weaker note but
traded with capped losses and also made an feeble attempt to recover. However,
though it recouped some of its losses in the late morning trade, the Markets
saw the selling pressure returning in the second half of the session. It
continued to drift lower as it went on to give the intraday low of 5238.90. It,
however, recovered a bit from those levels as it finally ended the day at
5258.50, holding on to its important support levels as it posted a net loss of
56.55 points or 1.06%. It has continued to form a lower top and lower bottom on
the Daily High Low Charts.
Beginning the new week for the Markets, expect the Markets
to open on a flat to mildly negative note and look for directions. There are no
clear directional triggers for the Markets but it trades with a mild downward
bias. It has closed exactly on the 50-DMA which
is 5258.50, and the trend would depend on the behavior of the Markets vis-à-vis
this level.
The levels of immediate supports are 5220 and 5180 on the
Charts if 50-DMA is breached.
The RSI—Relative Strength Index on the Daily Chart is
44.5581 and it has reached its lowest value in last 14-days which is bearish.
It does not show any bullish / bearish divergence. The Daily MACD continues to
remain bearish as it trades below its signal line.
NIFTY futures have further went on to shed Open Interest.
NIFTY PCR stands at 0.90 as against 0.92.
On the Weekly charts, on the Candles, An Engulfing Bearish Line has occurred. This pattern is bearish,
particularly in this structure of the Charts. It shows potential chances of
weakening of the Markets. However, this needs a confirmation. The RSI on the
Weekly Chart is neutral and the Weekly MACD trades above it signal line.
Having said this, it can be concluded that the Markets have
potential for little more weakness if it breaches the 50-DMA levels at Close.
There is absence of any clear directional trigger on the Charts and this points
towards a mild downward bias. In such circumstances, highly stock specific and
selective approach is advised. Range bound movement with some amount of
volatility ingrained in it cannot be ruled out. Overall, mildly positive
approach with tinge of caution is advised for today.
Milan
Vaishnav,
Consulting
Technical Analyst,
+91-98250-16331
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