Monday, February 4, 2013

Daily Market Trend Guide -- Monday, February 04, 2013

MARKET TREND FOR TODAY                                                    February 04, 2013
The Markets had a little disappointing session as it opened positive but spent rest of the session correcting again and ended the day with modest losses. The Markets opened on a positive note and made its intraday high of 6052.95 in the very early minutes of the trade. After continuing to trade in the green for couple of minutes, it gradually drifted into the red. The Markets transformed into intraday falling trajectory and remained so like this for the entire session. The Markets went on to give the day’s low of 5983.80 in the last minutes of the trade. It recovered a bit from those levels and finally ended the day at 5998.90, posting a modest loss of 35.85 points or 0.59% while forming a lower top and lower bottom on the Daily High Low Charts.

Today, we can expect some respite from the weakness that we saw on Friday. Expect the Markets to open on a moderately positive note and look for directions. Though intraday trajectory would be important to decide the trend for today, there is no break down on the Charts and the Markets continues to trade in a broad range.

For today, the levels of 6025 and 6060 shall as resistance for today and supports come in at 5975 and 5940 levels.

The RSI—Relative Strength Index on the Daily Chart is 49.7991 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bearish or bullish divergence. The Daily MACD continues to remain bearish as it trades below its signal line. On the Weekly Charts, the RSI is 64.4347 and it is neutral as it shows no failure swings or bullish or bearish divergences. The Weekly MACD remains bullish as it trades above its signal line. 

On the derivative front, NIFTY Futures have added over 5.58 lakh shares in Open Interest. This signifies that there was no long unwinding in Friday’s decline and heavy shorts have been created and added. The NIFTY PCR stands at 0.94 as against 0.90 and this too is quite healthy.

We can fairly conclude form the above reading that there is no major negative trigger or any breakdown on the Charts. The Markets are likely to remain in a broad trading range of 100-odd points and remain volatile within this but no major downside is seen.

All and all, given these technicals, the Markets have not shown any breakdown on the Daily Charts. Further, any major downside will occur only if the Markets slip below 5940 levels and until this happens, it shall continue to remain in a range and also the undercurrent remains perfectly in tact. In such circumstances, shorts should be strictly avoided. Fresh purchases may be made on a very selective note while maintaining cautiously positive outlook for the day.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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