MARKET TREND FOR TODAY
October 30, 2012
The Markets spent entire session yesterday in a falling
downward trajectory as it came off its highs after a positive start to end the
day flat with negligible gains. As it has been doing in previous sessions, the
Markets saw a positive opening and gave its intraday high of 5698 in the
morning trade. However, in the second half, it changed its sideward trajectory
and transformed itself into a falling channel and continued to drift for the
rest of the session. It went on to give the day’s low of 5645.10. It however,
recovered a bit from those levels and finally ended the day at 5665.60, posting
a negligible gain of 1.30 points or 0.02%, forming a almost parallel bar on the
Daily High Low Charts.
Today, expect the Markets to open on a flat and quiet note
and the session is likely to remain directionless in the initial trade. The RBI
is coming up with its Monetary Policy and the Markets are likely to react to
the rate announcements which shall come in later today. This is likely to keep
the Markets very volatile, but the bias continue to remain on the downside.
The levels of 5720-5740 shall continue to act as resistance
the level of 5630 shall act as support. Any drift below this level would take
the Markets further on the downside.
The RSI—Relative Strength Index on the Daily Chart is
52.7125 and it is neutral as it shows no negative divergence or failure swings.
The Daily MACD continue to trade below its signal line.
On the Derivative side, the NIFTY has continue to show
gradual and slow unwinding of long positions. The NIFTY futures have shed over
1.68 lakh shares or 0.90% in open interest.
Having said this, it certain that RBI announcements shall
make the Markets dance on its tunes in the mid session. Any positive surprise
shall see a pullback in the Markets but that will face resistance between the
levels mentioned above.
There is vast differences in the expectation in the Markets.
The Markets stands completely divided (through polls) regarding cuts in Repo
and Reverse Repo. But at the same time, majority expects a minor CRR cut. Any positive
surprise shall lead to a pullback in the Markets which have been trading in a broad range.
All and all, even in case of a pullback, it will still be in
a range and as mentioned on past several occasions, sustainable up move shall occur
only above the levels of 5740. Until this happens, volatility shall continue to
remain ingrained in the Markets and the bias will continue to remain on the
downside with the levels of 5630 acting a major supports. Any breach shall take
the Markets further down. Overall, continuance of cautious outlook is advised
for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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