MARKET TREND FOR TODAY
April 08, 2013
Markets ended the day in the red f or the third day in a row
after breaching its 200-DMA at close levels and on Friday also, ended the day
with modest losses. The Markets opened on mildly negative note and remained in
the negative territory throughout the session and never traded positive. After
opening on a modestly negative note, the Markets went on to give the day’s low
of 5534.70 in the late morning trade. However, in the second half, the Markets
did make an attempt to recover and at one point of time also recovered all of
its day’s losses and traded flat. However, the last hour of the session saw
some pressure building in again as the Markets again pared all of its recovery
and finally ended the day at 5553.25, posting a net loss of 21.50 points or
0.39% continuing to form a lower top and lower bottom on the Daily High Low
Charts.
Today, we are likely to see some initial weakness as we go
into the trade today. Expect the Markets to open on a modestly negative note
again and look for directions. Though
the Markets have lost over 150-odd points in last three sessions, it is yet to
get Oversold. Further, with no directional triggers, some weakness is likely
to continue in the initial trade.
For today, the levels of 200-DMA which the Markets breached,
i.e. 5641 would continue to act as immediate resistance for the Markets. The
Markets shall consolidate, but no reversal of the trend would occur until the
Markets move past these levels.
The lead indicators point towards some short term weakness
continuing. The RSI—Relative Strength Index on the Daily Chart is 32.4067 and
it has just reached its lowest value in last 14-days which is bearish. However,
it does not show any bullish or bearish divergence. The Daily MACD too
continues to trade below its signal line and is bearish. On the Weekly Charts,
the RSI is has just reached its lowest value in last 14-days, which is bearish,
but it does not show any divergence. The Weekly MACD too is bearish as it continues
to trade below its signal line.
On the derivative front, NIFTY futures have continued to add
over 10 lakh shares again or 6.43% in Open Interest.
The only positive reading here is that the NIFTY has been
adding heavy open interest with the fall that we saw in last three sessions.
This means that there are heavy short positions that have been created in the
system.
Given the heavy short positions, the Markets may see a
pullback later today or in a day or so, but as mentioned above the 200-DMA that
it breached on the downside shall continue to act as resistance. Given these levels,
it is now advised to avoid shorts but at the same time remain highly selective
in making purchases avoiding heavy exposures. Overall, cautious outlook is continued to be advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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