MARKET TREND FOR TODAY
December 05, 2012
The Markets had a range bound but utterly volatile session
as the Markets spent the entire session in a very capped range, but still ended
the day with moderate gains on the recovery it saw in the last hour of the
trade. The Markets opened moderately negative and after trading in a capped
range, it inched up further. However, in the afternoon trade, it lost some
ground, dipped into negative to give its intraday low of 5859. The Markets saw
some last hour short covering towards the end. It attempted to recover from its
lows, went in the green to give the day’s high of 5894.95. It came off a bit
again from those levels and finally ended the day at 5889.25, posting a
moderate gain of 18.30 points or 0.31% while forming a almost parallel bar on
the Daily High Low charts.
Today, on back of flat to moderately positive global cues,
expect a similar moderately positive opening in the Markets but for the first
time, the lead indicators have started showing signs of potential short term
weakness. The intraday trajectory that the Markets form shall continue to
remain critically important and there are chances of weakness creeping in as we
go ahead in the session.
For today, the levels of 5900 and 5930 shall act as
immediate resistance and the supports come in much loser at 5825 and 5770.
The lead indicators point towards possibilities of short
term weakness creeping in. The RSI—Relative Strength Index on the Daily Charts
71.6941 and is continues to remain in “OVERGOUGHT” territory. Though it does
not show any failure swings, the NIFTY has set a new 14-day high but the RSI
has not and this is “BEARISH DIVERGENCE”. The Daily MACD continues to trade
above its signal line.
On the Candles, engulfing bullish pattern has occurred.
If this occurs during an uptrend, which is the case with NIFTY, it may be a last
engulfing top which indicates a potential top formation. However, this
needs confirmation.
On the Derivative side, the NIFTY Futures Open Interest has
remained almost unchanged with nominal addition of 0.19% or just over 36000
shares. The NIFTY PCR stands at 1.07 as against 1.10 yesterday.
All and all, the positive opening is likely but there are
equal chances that we may see some weakness creeping in at later stage. It is
very strongly recommended that the fresh buying in aggressive manner should be
avoided. The Markets saw reactionary up move to the developments in parliament
on retail FDI front, but still no sustainable up move shall occur until the
Markets moves past 5930 levels. While avoiding fresh buys, cautious outlook is
continued to be advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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