MARKET TREND FOR TODAY
May 28, 2013
While defying all
technical indicators and the derivative data, the Markets had a robust
session and it ended the day with strong gains near its pattern resistance. The
Markets opened on a flat note and momentarily dipped into the red as it gave
its day’s low of 5975.55 in the very early minutes of the trade. The Markets
then immediately came into the positive territory and then spent most of the
session in a sideways movement and traded with capped gains. The last hour and
half of the session brought in bit a surprised as the Markets gained further
strength. It perked up further and went on to give the day’s high of 6099.90
towards the end of the session. It came of a bit from those levels but finally
ended the day at 6083.15, posting strong gains of 99.60 points or 1.66% while
forming a sharply higher top and bottom on the Daily High Low Charts.
Today, we are likely to see a flat opening in the Markets.
The Markets have closed near the pattern resistance levels of 6090-6100. This is
the level which it breached on its way down and therefore, it is likely that
the Markets shall resist at these levels. The opening, therefore, would be
crucial. If the markets manages to move past the levels of 6090-6100, it can
move up further, but otherwise, it may again resist at these levels and we may
the Markets consolidating again. Rollovers are likely to continue to dominate the
session.
For today, the levels of 6100 and 6130 shall act as
resistance. The supports come in much lower at 6020 and 5975 levels.
The lead indicators remain neutral. The RSI—Relative Strength
Index on the Daily Chart is 56.7271 and it is neutral as it shows no negative
divergence or failure swings. The Daily MACD continues to trade below its
signal line and therefore continues to remain bearish.
On the derivative front, NIFTY May futures have shed over
21.27 lakhs shares or over 8.79% in Open Interest whereas June Futures have added
over 24.71 lakhs shares or over 92.19% in Open Interest which signifies heavy
rollovers taking place.
Overall, if we go with the pattern analysis, the Markets are
likely to resist around 6100 levels. We might see temporary up move if the
Markets move past these levels but otherwise, the chances of the Markets
consolidating again are higher. However, this being the rollover week, the
volatility shall remain and we will see the Markets trading on either side in
the volatile manner.
All and all, the opening levels of the Markets and its behaviour
vis-à-vis the levels of 6100 shall dominate the directional trend for today.
The Markets are expected to find resistance around this levels. However, as
mentioned above, this being expiry week, volatile movements on either side
cannot be ruled out. It is advised to remain light on positions and taking aggressive
positions on either side should avoided. Overall, continuance of cautious
outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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