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Thursday, October 11, 2012

Daily Market Trend Guide -- Thursday, October 11, 2012

MARKET TREND FOR TODAY October 11, 2012

The Markets continued with the correction yesterday, though it made an intermittent attempt to recover but finally went on to end the day with losses. The Markets opened negative following weak technicals and subdued global cues and traded initially with capped losses. The Markets lost some further ground but in the mid session, it saw a bout of some recovery on back of short covering. However, that remained short lived as the Markets lost further ground as it went on to give it’s day’s low of 5647.05. The Markets did not recover much from those levels as it finally ended the day at 5652.15, posting a net loss of 52.45 points or 0.92%, forming a lower top and lower bottom on the Daily High Low charts.

Today, we can expect a moderately positive opening in the Markets. The intraday trajectory that the Markets forms would be very important today as all technical indicators and the patterns on the Charts point towards continuation of the corrective activities in the Markets.

The levels of 5630 would be immediate support for the Markets and the behaviour of the Markets vis-à-vis those support levels would be important. Any breach below 5630 will see the weakness deepening in the Markets.

The RSI—Relative Strength Index on the Daily Chart is 57.0274 and it has reached the lowest value in last 14-days which is BEARISH. The RSI has set a new 14-period low whereas NIFTY has not yet, and this is BEARISH DIVERGENCE. The Daily MACD is now trading below its signal line.

Having said this, it is further important to note that the NIFTY Futures have shed over 6 lakh shares in Open Interest and this clearly indicates long unwinding in the Markets. Unless we see any fresh buying, this may cause the corrective activities in the Markets to continue bit longer. The NIFTY PCR stands at 0.99.

All and all, the behaviour of the Markets vis-à-vis the levels of 5630 would be important. The Markets will have to remain above this level in order to avoid further weakness. Any dip below this will make the Markets weaker. While remaining ultra selective while taking positions, profits should be protected on either side. Overall, cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, October 10, 2012

Daily Market Trend Guide -- Wednesday, October 09, 2012

MARKET TREND FOR TODAY October 10, 2012

Markets had an terribly volatile session yesterday and on expected lines, declined from its day’s high though it still managed to end the day with moderate gains. The Markets opened positive following favourable global cues and in the mid session, gave its intraday high of 5728.65. However, in the second half of the session, Markets saw some pressure coming in and it started a gradual decline. It not only came off its highs, but pared all of its gains to trade briefly into negative giving day’s low of 5677.90. It managed to recover a bit from its lows and finally ended the day at 5704.60, posting a net gain of 28.60 points or 0.50%. It formed a lower top and higher bottom on the Daily High Low charts.

The Markets are likely to open on a moderately negative note and look for directions. The up move that we saw yesterday may prove itself to be just intermittent pullback and the Markets are likely to continue with their corrective activity which it began again in the second half of the session yesterday.

While the levels of 5750 may act as immediate resistance for the Markets, the immediate support for the Markets is likely to come in at around 5630 levels, a top which it breached on the upside on its way up.

The RSI—Relative Strength Index on the Daily Chart is 63.2046 and is neutral as it shows no negative divergence or failure swings. The Daily MACD has reported a negative crossover and it now trades below its signal line. This is bearish.

Stock Options have shown a mixed trend in Open Interest as some index components have shown minor addition, but most have shown shedding in Open Interest. This indicates that some unwinding is likely to continue. The NIFTY PCR stands at 1.03.

Having said this, it can be concluded that the Markets are not completely out of the woods as of today. In spite of some intermittent pullbacks that may be seen, overall, the Markets are likely to continue with their corrective activity and are likely to test the support levels of 5630, a double top neckline which it breached on the upside.

All and all, given this situation, while making new purchases highly selective approach should be adopted, though aggressive positions may still be avoided. Overall, continuance of cautious approach is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, October 9, 2012

Daily Market Trend Guide -- Tuesday, October 09, 2012

MARKET TREND FOR TODAY October 09, 2012

The Markets saw quite perfect correction which was long overdue as it opened moderately lower and then deepened its cut in the later session to end the day with losses. The Markets opened on a negative note as it give its intraday high of 5751.85 in the very early seconds of the trade. Thereafter, it dipped in the negative territory and remained in capped range. The Markets further deepened its losses in the second half of the session as it went on to gave the day’s low of 5666.20. The Markets did not recover as such at all and finally ended the day at 5676, posting a cut of 70.95 points or 1.23%.

For today, expect the Markets to open on a moderately positive note as a technical pullback is expected. Thus, a moderately positive opening can be expected but at the same time, intraday trajectory would be crucial as there are bright chances that the Markets continue with their corrective performance post positive opening.

For today, the levels of 5710 and 5725 shall act as immediate resistance levels.

All lead indicators continue towards impending weakness and the increased possibility of continued correction. The RSI – Relative Strength Index on the daily chart is 61.0695 and it has just given a “Sell” signal from OVERGOUGHT range. RSI has also reached its lowest value in last 14-days, which is bearish. Also, RSI has set a new 14-day low but the NIFTY has not and this is Bearish Divergence.

Further to this, NIFTY has shed 80,000 shares in Open Interest and thus, in yesterday’s session , some long unwinding has been observed.

Having said this, it is very much likely that the Markets continue to remain in correction mode. There are bright chances that the Markets opens firm and positive but gradually pare its gains as the session progresses. In such case, intraday trajectory would continue to remain crucial.

All and all, continuance of cautious outlook is advised. Investors should not get carried away by a opening up move and profits should be protected on long positions. The Markets may continue to remain in corrective move, baring a day or two of up move. Aggressive purchases may be avoided and cautious outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Monday, October 8, 2012

BRIEF MARKET FORECAST FOR THE DAY -- Monday, October 08, 2012

BRIEF MARKET FORECAST FOR THE DAY -- OCTOBER 08, 2012

Expect the Markets to open on a flat to mildly negative note. Kindly note that the Daily Charts show artificially intraday low due the the glitch in the Cash segment. However, the lead indicators, which are calculated on CLOSE price, indicate that the markets continue to remain "OVERBOUGHT". Having said this, it is likely that the Markets continue with their corrective activities. The levels of 5750 have continued to become immediate top for the Markets and no runaway rise is expected until then.

The Markets may thus continue to consolidate and continue with the correction even if minor bouts are seen. Overall movement shall remain in a broad range. While avoiding fresh buys, selective and cautious approach is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331