MARKET TREND FOR TODAY
January 23, 2013
The Markets had a little disappointing session yesterday,
though quite on expected lines as it opened positive but ended up with modest
losses. The Markets opened on a positive note and traded in a capped range and
continued to consolidate in the first half of the session as it gave its
intraday high of 6101.30. The Markets continued to trade in a range after that
never really showing the required strength to move past those levels. After
trading sidewards for a while, the Markets pared its morning gains and slowly
drifted into the red. The losses got little deep as it went on to give the day’s
low of 6040.50 towards the end of the session. No major recovery was really
seen towards the end and the Markets finally ended the day at 6048.50 posting a
net loss of 33.80 points or 0.56% while still forming a higher top and higher
bottom on the Daily High Low Charts.
Today’s analysis may remain more or less same as that of
yesterday. Today, the Markets are expected t o open on a moderately positive
note and look for directions. However, at the same time it is likely that they
continue to consolidate and thus traded in a capped range. The intraday trajectory
it forms after opening would therefore be crucial to decide the trend for the
day.
For today, the levels of 6090 and 6125 shall act as supports
and the levels of 5990 and 5950 shall act as immediate supports on the Daily
Charts.
The lead indicators for the Markets are neutral to mildly
bullish. The RSI—Relative Strength Index on the Daily Chart is 60.6395 and it
is neutral as it shows no failure swings or bullish or bearish divergences
today. The Daily MACD is bullish as it continues to trade above its signal
line.
On the derivative front NIFTY has reported net shedding of 7.23
lakh shares in Open Interest which is a slight negative for the Markets as it
suggest some long unwinding yesterday. However it remains to be seen if this
changes into fresh buying today. The NIFTY
PCR stands at 1.12 as against 1.17.
Given the pattern analysis of the Markets, even though the
undercurrent remains buoyant, it would be a while when the Markets makes a new
high and a sustainable rally is seen. If pattern analysis is done along with
the reading of the technical indicators, there are clear chances that we may
see the Markets continue to consolidate in a broad 70-100 point range on either
side before it resumes its rally which is sustainable at higher levels.
All and all, the undercurrent remains intact but consolidation
and minor profit taking from higher levels in case of positive opening cannot
be ruled out. Given the above reading, it is continued to be advised to
approach the Markets on highly selective
basis and take fresh positions very selectively while strictly avoiding shorts.
Profits too should be protected at higher levels and aggressive positions
should be avoided. Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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