Friday, March 9, 2012
MARKET TREND FOR TODAY March 9, 2012
The markets were closed yesterday on account of Holi and on Thursday, closed flat with nominal gains after a range bound and volatile day. The Markets on Wednesday opened on a negative note and after briefly trading into negative, managed to come back into the positive territory and gave its intraday high of 5243.85. The Markets traded into the green for a very brief period in the early afternoon trade and then slipped into the negative territory again and went on to give the day’s low of 5171.45. However, in the last hour and half of trade, it saw some short covering as it recovered from its low to finally end the day at 5220.45, posting nominal loss of 1.95 points or 0.04%. In the process, it has formed a lower top and lower bottom on the Daily High Low charts.
We have had a truncated and short trading week with just 4 trading sessions. For today, expect the Markets to open more or less flat and look for directions. The intraday trajectory would be crucial to decide the trend for today, while keeping the overall Markets in a range and also bit volatile.
For today, the levels of 5164 and 5149 which are the 200-DMA and 100-DMA of the Market respective are expected to act as major supports for the Markets with the resistance coming in at 5245 and 5290 levels.
The lead indicators continue to show some weakness. The RSI—Relative Strength Index on the Daily Chart is 42.8564 and it has reached its lowest value in last 14-days, which is Bearish. The Daily MACD continues to trade below its signal line and that too is bearish.
The Markets on Wednesday gave its intraday low of 5171.45. It has attempted to take support near its 200-DMA of 5164. Also, the 100-DMA is just few points below this at 5149 and thus, like Wednesday, the Markets are very near, i.e. around 1-1.5% range of its two major supports. So, until these supports are breached on the downside, no major fall in the Markets can be expected. Until this happens, the Markets may remain in a range or volatile. However, at the same time, NIFTY futures have shown net decrease in Open Interest and this implies that the last hour recovery on Wednesday was more of short covering than fresh buying.
Thus, in such contradictory readings, it is advised to refrain from any major shorts until the Markets breaches the levels of 5164-5148 supports. At the same times, any fresh positions may be taken very selectively. The next week has two very important events, the Monetary Policy and the Union Budget coming up and the Markets shall react to that. This may keep today’s session range bound and volatile. Overall, very stock specific approach with caution is advised for today.
Consulting Technical Analyst,
Wednesday, March 7, 2012
MARKET TREND FOR TODAY March 7, 2012
The Markets saw wild swings yesterday on back of UP elections outcome as it swung nearly 175-odd points both sides to ultimately end the day lower. The Markets opened weak as expected and grew weaker in the initial trade. However, it saw a very sharp and violent upside as the Markets expected SP would need Congress to form government in UP. On this expectation, the Markets went on to give its intraday high of 5382.05. However, with the things clarifying and the SP needing no help from congress saw the Markets paring all of its gains. It came of from its highs and gave its intraday low of 5206.40, as it came off 175-odd points from its day’s high. It finally ended the day at 5222.40, posting a net loss of 57.95 points or 1.10%. In the process, it has formed a higher top but lower bottom on the Daily High Low Charts.
For today, expect the weakness in the Markets to continue, at least in the initial trade. The Markets are expected to open on a lower note and trade negative in the initial session. Today, its intraday trajectory would be critical to decide the trend for the day.
The election outcome in the UP has been perceived negative by the Markets as this translates, as per Markets, into weaker Congress at the Centre, continuation of policy paralysis, fears of populist budget, etc. On the Global front too, the US Markets ended lower and the Europe too ended very weak yesterday.
However, a look on the technicals is also very important. The Markets continue to remain weak on the Charts, but very important support for the Markets exists at the levels of its 200-DMA, i.e. at 5165 and 5139 which is its 100-DMA. So, the weakness is likely to continue but the Markets may find support in the next 1-1.5% of its range.
The RSI—Relative Strength Index on the Daily Charts is 42.9854 and it has reached its lowest value in last 14-days, which is Bearish. The Daily MACD continues to trade below its signal line and is Bearish.
NIFTY Futures have added 25 lakh shares in Open Interest and the Stock Futures shed 69 lakh shares in Open Interest which indicates that while unwinding of stocks futures took place, some hedge is also created by fresh creation of Shorts in the NIFTY Futures.
Having said this, weaker opening expected, but now we advice to refrain from aggressive shorting in the Markets as Markets near two of their major support in the 1-1.5% range. Very selective purchases may be made. Stock specific activities may continue to be seen. Volatility too cannot be ruled out. So, until next week, aggressive positions in the Markets on the either side should be avoided. Overall, cautious approach is advised in the Markets.
Consulting Technical Analyst,
Tuesday, March 6, 2012
MARKET TREND FOR TODAY March 6, 2012
The Markets remained bearish yesterday as the exit polls failed to provide any positive trigger and the technicals, which had a negative bias on the Charts weighed in and the Markets ended the day with losses . The Markets opened on the negative note and remained negative for the entire session as it went on to give the intraday low of 5265.70. The Markets never saw any significant recovery as it also ended the day near the low point of the day at 5265.70, posting a loss of 79.05 points or 1.47%. In the process, it has formed a sharply lower top and lower bottom on the Daily High Low charts.
For today, the Chart Pattern Analysis as well as the lead indicators continue to paint a weak picture and very clearly suggests the weakness to continue unless some external news flow poses a positive surprise.
For today, expect the Markets to open on a negative note and look for directions. The Levels of 5400-54220 zone has so far acted as immediate top for the Markets and after brief accumulation on the Charts it has given up yesterday and thus, purely speaking on technical terms, the weakness is likely to continue. The Markets has minor support on the 5280 levels, but the opening would be certainly lower than this and this support might not hold good any more. The major support now comes in at 5225 and 5166 which is the 200-DMA for the Markets.
The lead indicators point towards continuing weakness. The RSI—Relative Strength Index on the Daily Chart is 46.8791 and it has reached its lowest value in last 14-days which is Bearish. It does not show any negative divergence. The Daily MACD continues to remain Bearish as it trades below its signal line.
The UP Election counting shall start throwing up results today. Any positive deviation from what the Exit Polls showed on Saturday would cause the Markets to rally, but this is very less likely. If something completely different comes, what is shown otherwise in the exit polls, would favorably change the equation for better at the Centre and this can cause the Markets to rally, putting all technicals aside. However, as said earlier, it has remote possibilities.
All and all, caution towards creation any aggressive positions is advised. As we have been advising earlier, longs should be taken very selectively with very vigilant protection of profits. Purchases may be initiated only after the Markets nears its stable support levels. Until then, extremely cautious outlook is advised for the day.
Consulting Technical Analyst,
Monday, March 5, 2012
MARKET TREND FOR TODAY March 5, 2012
Markets had an truncated session on Saturday for one hour and forty five minutes to test its disaster management and recovery systems and the Markets expectedly traded in a range and remained sluggish to end the day flat. The Markets always remain very flat in such sessions on account of less trading time and even lesser participation. The Markets ended the day at 5359.40, posting a very negligible loss of 0.05 points or 0.001%. With this, the Markets have ended the week with net loss of 69.90 points or 1.24%.
This week and the next week, i.e. the next fortnight would be very important for the Markets to decide its trajectory for the immediate short to medium term. The next fortnight has nine sessions and very three important news flow to react to, i.e. the UP elections, the Credit Policy and offcourse, the Union Budget.
The exit polls do not suggest the clean victory for the Congress. The SP is expected to emerge a single largest party and the result would be a hung assembly. This is not a news flow that the Markets will react with a bang.
For today, expect the Markets to open on a flat to mildly negative note and look for directions. The lead indicators point towards no big runaway rally (except one created by news flows) and the pattern analysis point towards a negative bias. The RSI—Relative Strength Index on the Daily Chart is 52.9550 and it is neutral as it shows no negative divergence or failure swing. The Daily MACD continues to remain Bearish as it trades below its signal line. On the Weekly Charts, the RSI remains neutral and the pattern analysis points towards no big rally.
Having said this, it is important to note that the technicals are likely to take a back seat given the three important events and the news flow. However, the outcome of the first one is likely to be a dampener, unless some fruitful partnerships are worked out. The two others are yet to come. Also important to note that the Markets may rally with the positive news flow and in the same manner, slightest of the negative point will have the technicals take over and they certainly have a negative bias.
All and all, very cautious approach is advised for the next fortnight, starting from today. Very selective purchases should be made and profits should be protected equally vigilantly. Aggressive positions should be avoided on either side. Overall, cautious approach is advised for today and few more days to come.
Consulting Technical Analyst,