MARKET TREND FOR TODAY
October 03. 2012
The Markets remained overbought on Monday, but still had a
very capped session witnessing bouts of short covering and had a session with
ended with modest gains. The Markets opened on a moderately positive note but
moved in a very capped range in the first half of the session, moving around
its previous close. The Markets, however, saw some short covering in the later
part of the session as it move up a bit,
and gave its intraday high of 5722.95.
It again moved around to levels in a very tight and capped range and
finally ended the day at 5718.80, posting a modest gain of 15.50 points or
0.27%, while forming a lower top and higher bottom on the Daily High Low
charts.
For today, expect the Markets to have a negative opening and
get into further consolidation / minor correction mode which is long overdue as
it continues to remain “Overbought” with bearish divergence. The Markets are
expected to open negative and we may see minor correction creeping into the
Markets.
For today, the levels of 5675 and 5640 are immediate
supports on the Charts with the levels of 5750 acting as immediate top.
The RSI—Relative Strength Index on the Daily Charts is
73.0590. The NIFTY has set a new 14-day high but the RSI has not and this is
BEARISH DIVERGENCE on the Charts. The Daily MACD continues to trade above its
signal line.
Though the NIFTY and Stock futures have continued to add in
Open Interest over last few days, in the Monday’s session some shedding of Open
Interest too was observed. This signifies that the Markets are getting weary at these levels and some technical
correction can be expected.
Having said this, for today, it is strongly advised to
refrain from aggressive buying and highly stock specific approach is advised. It is likely that the
Markets may open negative, may recover a bit also, but with any correction,
given this structure of the chart, the rise would be unhealthy for the Markets
given the pattern analysis. Some correction is imminent and the Markets are NOT
poised for any runaway rise until that happens. Overall, continuance of
cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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