Monday, November 26, 2012

Daily Market Trend Guide -- Monday, November 26, 2012

MARKET TREND FOR TODAY                                                  November 26, 2012
The Markets on Friday ended the day on a flat note after it recovered from its day’s low continuing with its consolidation. The Markets opened on a flat to mildly positive note and gave its intraday high of 5637.75 in the early minutes of the trade. The Markets continued to trade in a very capped range  in the morning trade but thereafter lost some ground as it continued to slip gradually. It not only dipped into the red, but went on to give the intraday low of 5593.55. However, in the last hour and half of trade, the Markets saw some recovery coming in form of short covering. It recovered from its lows and finally ended the day at 5626.60, posing a net loss of 1.15 points or 0.02% forming a lower top and lower bottom on the Daily High Low Charts.

Today, we enter into the expiry week of the current series and the Market behaviour in coming days is all set to remain influenced with the rollover activities. For today, expect the Markets to open on a moderately positive to flat note and the behaviour of the Markets vis-à-vis the levels of 5630 would be critical. The Markets will have to remain above this levels to avoid any weakness creeping in.

For today, the levels of 5630 and 5675 shall act as immediate resistance levels and the levels of 5575 and 5530 are immediate supports.

The RSI—Relative Strength Index on the Daily Charts is 47.6575 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD continues to remain bearish as it trades below its  signal line. On the Weekly Charts too, the RSI is neutral without showing any failure swings or bullish / bearish divergence. The Weekly MACD trades above its signal line.

Going by the above, the Markets do not have any specific directional triggers on the upside and thus, it is sure to remain influenced with the rollover activities. The NIFTY futures have shed over 6 lakh shares or 4.8% in Open Interest on Friday. This signifies that the rise that we saw towards the end of the session was more due to short covering and not due to any fresh buying.

Having said this, the opening levels of the Markets and the behaviour vis-à-vis the levels of 5630 would be important. It will have to comfortably sustain above this levels in order to avoid any weakness.

All and all, the intraday trajectory the Markets form would be important to decide the trend for today. Stock specific  and rollover centric activity shall dominate the Markets. Overall structure and pattern analysis of the Markets show to directional triggers on the upside. While remaining highly stock specific and cautious, aggressive positions are not advised.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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