MARKET TREND FOR TODAY
October 18, 2012
The Markets had a relatively disappointing session as it
opened strong on positive global cues, but technical took over later as it
pared all of its gains to end the day with just minor gains. The Markets opened on a positive note and
made it intraday high of 5684.35 in the very early seconds of the trade. The
Markets converted itself into falling trajectory after that and kept paring its
opening gains gradually. It later dipped into negative and went on to give the
day’s low of 5633.90 and finally ended the day at 5660.25, posting a minor gain
of 12.25 points or 0.22%. It made a lower top and similar bottom on the Daily
High Low charts.
Today’s analysis would remain more or less similar to that of yesterday. The support levels of
5630 has held out again and we can see positive opening in the Markets today,
but intraday trajectory would be crucial again like yesterday to determine the
trend for the Markets. It would be critical to see that after opening positive,
the Markets sustains the opening gains and stays afloat the levels of 5630.
For today, the levels of 5675 and 5710 shall act as
immediate resistance levels and the levels of 5630 would act as immediate and
important support.
The RSI—Relative Strength Index on the Daily Chart is
55.3894 and it is neutral as it shows no negative divergence or failure swings.
The Daily MACD continues to trade below its signal line and is bearish.
As the Markets have been doing in last couple of session,
the NIFTY Futures have continued to shed Open Interest. It shed 2.88 lakh
shares or 1.20% in Open Interest. This continues to signify that there has been
long unwinding in the Markets.
Going by the above, it would be extremely necessary and
critical for the Markets to see that it remains above the levels of 5630 in positive
trajectory. Any dip below 5630 would induce further weakness in the Markets.
However, the pattern analysis and F&O statistics show larger possibility of
Markets either trading in a range, or getting bit weaker.
All and all, even with some intermittent bouts, the Markets are not completely out of
woods. Intermittent pullbacks might be seen, but sustainability would depend on
if that is short covering or adding of fresh longs. While taking long positions
very selectively, continuation of cautious approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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