MARKET TREND FOR TODAY May 06, 2013
The Markets had an expectedly volatile session and traded
much in line with what was analysed in our Friday’s edition of Daily Market
Trend Guide. The Markets opened negative and remained volatile in the entire
session while reacting to the RBI Credit Policy Announcements and ended the day
with losses. The Markets opened on a negative note and traded in the negative territory in the morning
session. Following the RBI announcements, it saw some sharp recovery. The
Markets recovered from its lows to trade flat near the previous day’s close
levels. However, this recovery did not sustain from afternoon until the end of
the session, the Markets continued to gradually lose ground. It went on to give
the day’s low of 5930.15 and ended the day at 5944, posting a net loss of 55.35
points or 0.92% while forming a lower top and higher bottom on the Daily High
Low Charts.
Today, we may see some respite from the weakness that we saw
on Friday as we can expect a flat to moderately positive opening following
positive global markets. However, after the initial positive opening, the
Markets are likely to consolidate again and might see some continuing minor
correction. However, intraday trajectory would be greatly important today as
they would dictate the intraday trend.
For today, the levels of 5965 and 5990 shall act as
important resistance levels. The supports come in at 5890 and 5850 levels.
The RSI—Relative Strength Index on the Daily Chart is
62.7812 and it is neutral as it shows no negative divergence or failure swings.
The Daily MACD is bullish as it continues to trade above its signal line. On
the Weekly Charts, the RSI is 57.4644 and this too is neutral as it shows no bullish
or bearish divergence or failure swings. The Weekly MACD remains bearish as it
trades below its signal line.
On the derivative front, NIFTY May futures have shed over
2.28 lakh shares or 1.22% in Open Interest. This signifies some minor shedding
of long positions.
The Markets have shown some disappointment with the RBI
Credit Policy wherein the CRR was left
unchanged with only a 25 bps cut in the repo rate. The RBI has also made
its point of view very clear that there is very little space for it to cut
rates and so not more than one rate cut can be expected in the rest of the
year. The Markets expected something that RBI was not supposed to deliver. RBI
has been fundamentally correct in its stand and has believed OMOs to be equally better than using CRR as a tool to
control liquidity.
Having said this, it is likely that after initial positive
opening, we may see some consolidation continuing in the Markets. The levels of
6010 have become immediate top and fresh sustainable up move shall occur only
once the Markets move past these levels. Until this happens, it can either
trade in a range or consolidate or some temporary weakness. It is advised to
avoid aggressive purchases and fresh positions may be taken with extremely
selective approach. Overall, while remaining light on positions, cautious
outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.