Thursday, May 30, 2013

Daily Market Trend Guide -- Thursday, May 30, 2013

MARKET TREND FOR TODAY                                                                 May 30, 2013
The Markets spent a typically rollovers dominated session as it remained in the negative territory for the entire session and after briefly attempting recovery towards the end, closed with nominal losses. The Markets opened on a mildly negative note and after trading briefly in a range, slipped further to give the day’s low of 6069.80 in the afternoon trade. The Markets remained in falling trajectory until afternoon, but the second half of the trade saw the Markets attempting a recovery. The Markets saw short covering causing a spurt in the last hour of the trade where the Markets recouped all of its losses to trade flat. However, in the end the Markets ended the day at 6104.30, posting a nominal loss of 6.95 points or 0.11% while forming a similar top and higher bottom on the Daily High Low Charts. 


Today is an expiry day of the current derivative series and therefore, expect the session to remain heavily dominated again with rollover centric activities. The analysis for today remain on similar lines as well as the Markets continue to consolidate in a capped range. Expect the markets to open on a flat note and will look for direction and the behaviour of the Markets vis-à-vis its pattern resistance levels of 6100 would be crucially important. Any breach below this level will bring in weakness in the Markets.

The levels of 6130 and 6145 shall act as resistance today and the supports come in much lower at 6035 and 5980 levels.

The lead indicators continue to point towards mild downward bias. The RSI—Relative Strength Index on the Daily Chart is 57.8350 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the Derivative front, the NIFTY has reported no major addition in total open interest however heavy rollovers continued in NIFTY as well as in Stock Futures. Key stocks reported minor shedding of total open interest.

If we take into account the F&O data and also rely on the pattern analysis, the Markets are likely to continue to consolidate and there are some moderate chances of slipping it below 6100 levels and this can induce some weakness. The Markets will have to maintain levels comfortably above 6100 in order to avoid any weakness creeping in but the chances of some more correction, if not today, then in the next week just cannot be ruled out as there are no explicit triggers on the upside.

All in all, today being the expiry day, the session will definitely remain dominated with rollover centric activities. This is likely to keep the Markets highly volatile and swings on either side cannot be ruled out. With the consolidation continuing and with Markets not taking any clear directional trend, it is continued to be advised to remain light on positions while protecting profits wherever available. Cautious approach is continued to be advised as the bias remains mildly on the downside with no explicit triggers for an up move expect the rollovers induced volatility.

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


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