MARKET TREND FOR TODAY
January 17, 2013
The Markets had an disappointing session yesterday wherein
it corrected from its key resistance levels, much on expected lines and ended
the day with losses. The Markets opened on a negative note and gave its
intraday high of 6055.95, in the very early seconds of the trade. Until the
late afternoon trade, the Markets continued to trade in a band with modest
losses but in the last hour and half of the trade, the selling pressure on the
Markets intensified as it dipped further into the red as it gave its day’s low
of 5992.05. The fall was lead by banking, auto and realty stocks. It finally
ended the day at 6001.85 posting a net loss of 54.75 points or 0.90% while
forming a lower top but higher bottom on the Daily High Low charts.
Today, we might see some respite from the weakness we saw
yesterday in the second half of the session. The Markets today are likely to
open on a moderately positive note and look for directions. With the Markets
not moving past the levels of 6050 yesterday, it is still very much in a broad
trading range and thus intraday trajectory would continue to remain crucial to
decide the trend for today.
For today, the levels of 6030 and 6055 shall act as
immediate resistance for the Markets and the levels of 5950 shall act as
immediate supports.
The RSI—Relative Strength Index on the Daily Chart is
58.6359 and it is neutral as it shows no negative divergence or failure swings.
The Daily MACD is bearish as it has reported negative crossover and it now
trades below its signal line.
On the derivative front, NIFTY January futures have shed
over 9.71 lakh shares or 6.26% in total Open Interest. This signifies that
there was long unwinding yesterday and not creation of fresh shorts. This is
negative sign but it remains to be seen
if we see creation of fresh longs at any given levels.
The yesterday’s weakness was attributed to RBI Governor’s
remark of the inflation being too high to consider any rate cuts. This lead to
reaction in the rate sensitive stocks. However, this being discounted, and if
we go strictly by the pattern analysis on the Daily Charts, the structure
suggests that the Markets may continue to remain under range bound
consolidation before it breaks out on the upside with a sustainable rally.
All and all, even with moderately positive opening expected,
the Markets are likely to remain in a b road trading range. This will have some
volatility ingrained in it. Unless the Markets breaks the levels of 5950 on the
downside, there will be no technical weakness on the Charts. Overall, we
continue to reiterate to avoid shorts and at the same time remain light and
ultra selective while taking long
positions. While protecting profits wherever possible, cautious outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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