MARKET TREND FOR TODAY
October 19, 2012
Contrary to expectations, the Markets saw a very buoyant session
yesterday as after opening and trading briefly into the red, the Markets saw a
decent spurt and ended the day with decent gains. The Markets opened on a
mildly negative note and gave its intraday low of 5650.55 in the early morning
trade. Thereafter, after briefly trading into the red, the Markets saw a very
sharp rally and remained in upward rising trajectory until the end of the
session. It went on to give the day’s high of 5722.50 and finally ended the day
at 5718.20, posting a net gain of 58.45 points or 1.03%. It has formed a higher
top and higher bottom on the Daily High Low Charts.
For today, expect the Markets to open on a mildly negative
to flat note and consolidate in the early trade. Much would continue to depend
upon the intraday trajectory that the Markets would form to see if the Markets
consolidates or continue with the up move as it is still in a broad trading
range with no breakout on the upside.
The levels of 5730 and 5790 shall act as immediate
resistance levels and the levels of 5630 shall continue to act as major support
levels for the Markets.
The RSI—Relative Strength Index on the Daily Chart is 60.4124
and it is neutral as it does not show any bearish or bullish divergences or any
failure swings. The MACD still continues to remain bearish as it trades below
its signal line.
The NIFTY Futures have shown minor addition of Open Interest
and the NIFTY PCR stands at 1.07 as against 1.
Going by the pattern analysis, the Markets, after making a
high of 5807, has been consolidating in a broad trading range of approximately 170
points with the levels of 5630 acting as the lower band and a important support. Therefore, for
any sustainable up move to occur, the Markets will have to move past and
sustain above the levels of 5810. Until this happens, any rise in the Markets
shall open remain to consolidation or correction and the sustainability would
remain under question.
All and all, the Markets still continue to remain in broad
trading range and it is yet to give any positive breakout. Until this happens,
we will see the Markets trading in broad range and will also see good amount of
volatility ingrained in it. While remaining selective on fresh positions, we
continue to advise to have very cautious approach to the Markets today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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