MARKET TREND FOR TODAY
December 20, 2012
The Markets continued to inch up further as it ended the day
with modest gains but spent the entire session in a tight and capped range. The
Markets opened positive and gave its intraday high of 5939.40 in the early
minutes of the trade. Thereafter, it spent the entire session in a very narrow
trading range and remained in sideward trajectory for the entire session. It
kept gaining and losing ground in between. It continued to do so until the end
of the session and finally managed to end the day at 5929.60, posting a modest
gain of 32.80 points or 0.56%. The Markets have formed a higher top and higher
bottom on the Daily High Low Charts.
Today’s behavior of the Markets would be critically
important for the Markets. The Markets are expected to open on a flat to mildly
positive note and look for directions. The opening levels, if positive would be
around the upper resistance levels of 5950-5960 and the behaviour of the
Markets vis-à-vis these levels would be
critically important to see if they give a upward breakout or not.
For today, the levels of 5950-5960 would be important resistance
levels and supports come in much lower at 5860 and 5810 levels.
The lead indicators have turned from neutral to mildly
bullish. The RSI—Relative Strength Index
on the Daily Chart is 66.5258 and it is neutral as it shows no bearish or
bullish divergences and also it does not show any failure swings. The Daily
MACD has again turned positive as it now trades above its signal line while is
bullish.
On the Derivative front, the NIFTY Futures have shed over
2.64 lakh shares or 1.22% in Open Interest which is not a good sign. The NIFTY PCR stands at 1.07.
Having said this, from the above reading, there are clear
contradiction from the lead indicators which are neutral to mildly bullish and
in the Derivative data which show some long unwinding and short covering in the
Markets.
It is also important to note that the Markets have not
achieved a complete breakout and its behaviour around the critical resistance
levels of 5950-5960 would be critically important to watch for. A comprehensive breakout is required for a
sustainable fresh up move to begin and sustain. With the contradictory signals on the lead
indicators and the derivative data, it is likely that the Markets still remains
volatile and in a range.
All and all, it is advised to continue with a selective and
cautious approach in the Markets. While remaining very vigilant and protecting
profits on either side, fresh positions should be taken on very selective
basis. With the bias remaining neutral to positive, aggressive stance in the
Markets should be avoided until clear breakout is achieved.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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