MARKET TREND FOR TODAY
May 27, 2013
The Markets headed nowhere as it consolidated in a narrow
band and ended the day with moderate gains after a mildly positive opening. The
Markets opened on a positive note and gave its intraday high of 6015.30 in the
very early minutes of the trade. After opening around these levels the Markets
did not sustain and slipped into the red and gave its day’s low of 5936.80 in
the late morning trade itself. However, the late morning trade saw some
recovery from its day’s lower levels as the Markets came back into the green to
trade positive by afternoon. However, from afternoon, until the end of the
session the Markets headed nowhere as it continued to trade in sideways in a
capped band. The Markets continued to trade with capped gains until the end of
the session. It finally ended the day at 5983.55, posting a nominal gain of
16.50 points or 0.28% while continuing to form a lower top and lower bottom on
the Daily High Low charts.
Today, expect the Markets to open on a flat to
moderately negative note and look for directions. Both, the technical
indicators as well as the derivatives data show that there are no explicit
triggers for the Markets to pullback. Any pullback, like that of Friday, may
remain temporary and overall, the Markets are likely to continue to see corrective
activities and may continue to move towards its 100-DMA.
For today, the levels of 6010 and 6035 shall act as
immediate resistance for the Markets. The supports come in at 5940 and 5875
levels.
All lead indicators point towards correction continuing in
the Markets. The RSI—Relative Strength Index on the Daily Chart is 49.8999 and
it shows no bearish or bullish divergence or failure swing and is therefore neutral.
The Daily MACD is bearish as it trades below its signal line. On the Weekly
Charts, the RSI is 55.7508 and is
neutral as it does not show any failure swings or any kind of divergences. The
Weekly MACD trades above its signal line. On the Weekly Candles, An engulfing bearish line occurred (where a black
candle's real body completely contains the previous white candle's real
body). The engulfing bearish
pattern is bearish during an uptrend (which appears to be the case with
NIFTY). It then signifies that the
momentum may be shifting from the bulls to the bears.
On the derivative front, NIFTY May futures have shed over 7.31
lakh shares or 2.93% in Open Interest. This clearly show offloading of
positions again from higher levels on Friday.
Having said this, the expiry week has begun and therefore, we will
also see the sessions being dominated with rollover centric activities.
However, there are no explicit triggers for the Markets to reverse and
therefore, it will continue to trade in a given range, of course with a weaker
bias.
Given these readings, we continue to advice to remain highly
selective in taking fresh positions. Aggressive positions now on either side
should be avoided and while taking selective positions, profits should be
vigilantly protected. If the Markets do not get any positive triggers, it is
likely to test its 100-DMA at Close levels which can act as it’s immediate short
term support. Overall, approaching Markets with mild degree of caution is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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