MARKET TREND FOR TODAY
November 1, 2012
The Markets had a range bound and volatile session yesterday
but it ended the day on a moderately positive note although it has resisted
perfectly near the levels of 5630 mentioned by us in our yesterday’s edition of
Daily Market Trend Guide. Markets opened
on a moderately positive note but soon dipped into the negative territory. It
managed to pullback into the green, but saw some pressure again as it again
dipped into the negative, giving the day’s low of 5583.05. However, in the
second half of the trade, the Markets saw some short covering led rally. It
managed to recover from its day’s low and also managed to give the day’s high
of 5624.40. It finally ended the day near that point at 5619.70, posting a
moderate gain of 21.80 points or 0.39%, while continuing for form a lower top
and lower bottom on the Daily High Low charts.
For today, expect the Markets to open on a moderately
negative note and look for directions. The Markets are likely to open shedding
most of its yesterday’s gains and the levels it resisted yesterday would
continue to pose immediate resistance. Intraday trajectory that it forms would
be critical to dominate the trend for today.
For today, the levels of 5630 and 5655 shall continue to act
as immediate resistance and the levels of 5530 shall continue to act as
immediate support for the Markets.
All lead indicators continue to point towards directionless
trade with little downward bias. The RSI—Relative Strength Index on the Daily
Chart is 47.9091 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.
In yesterday’s trade, the NIFTY Futures have reported
shedding of Open Interest of over 4.06 lakh shares or 2.27%. This is a clear indication
of short covering and also, it can be clearly interpreted that the rise in the
second half of the session was due to short covering and not due to fresh
buying.
As mentioned in our yesterday’s edition, the levels of 5630,
which the Markets broke on its way down shall now as resistance followed by the
levels of 5650.
Having said this, the Markets have formed a small falling
channel from its high of 5830 and no sustainable fresh up move is expected
until the Markets reverses this and this will cause the Markets to continue to
trade in a range with downward bias.
All and all, we can fairly expect a range bound trade to
continue with the levels of 5630 acting as immediate resistance. The Markets
are likely to test the supports of 5530-5550 levels even if we see intermittent
pullbacks as yesterday. Fresh positions can be taken, but very selectively as
sectoral out performance would be seen. Overall, moderately cautious outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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