MARKET REPORT
June 06, 2013
The Markets traded precisely as analysed in our yesterday’s
edition of Daily Market Trend Guide as it opened weak on a lower note and then
took support near its 50-DMA and showed a resilience, very much on expected
lines. We had categorically mentioned that the Markets shall open lower on back
of weak global markets but are expected to take support at its both of the
DMAs. The Markets opened on a lower note and made its intraday low of 5869.50
in the very early minutes of the trade. Thereafter, the Markets showed
resilience to global weakness as it transformed itself into rising channel and
kept recovering steadily. By afternoon trade the Markets recovered all of its
opening losses to trade flat. It perked up further in the second half of the
session and even went on to give the day’s high of 5956.55. However, towards
the end, the Markets came off a bit from its highs and finally ended the day
absolutely flat at 5921.40, posting a negligible loss of 2.45 points or 0.04%
forming a higher top but lower bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a flat to modestly
negative note and look for directions. Though the Markets showed resilience to
the global weakness on expected lines, it is not completely out of woods and
might continue to consolidate / correct a bit from current levels. However, the
analysis remain absolutely clear that so long as it maintains levels above its
100 an 50%, it will consolidate in arrange. Only the breach below these DMAs
will induce weakness.
For today, the levels of 5950 and 5965 shall act as
immediate resistance on the Charts and the levels of 5895 and 5882 shall act as
supports in the short term. Any breach below 5882 shall cause the markets get
further weak.
The lead indicators continue to remain neutral to mildly
bearish. The RSI—Relative Strength Index
on the Daily Chart is 43.7558 and it is neutral as it shows no bullish or
bearish divergence or failure swings. The Daily MACD is bearish as it continues
to trade below its signal line.
On the Derivative front,
NIFTY Future have continued to shed over 7.02 lakh shares or 5.34% in
Open Interest. This is a very clear indication that all recovery that we saw
yesterday post opening has been due to short covering and no buying has been
seen. This is certainly a negative for the Markets.
Overall, since the Markets too support at its two DMAs
yesterday, technically speaking, so long as they maintain the levels above
those levels, it may continue to trade in a broad trading range. However, if it
breaches those two levels, it will certainly induce further weakness in the near
term.
All and all, so long as the Markets trades above the levels
of 5895-5900, we will see showing resilience to any kind of weakness and range
bound trading can be expected. However, if the Markets breaches the levels of
5880, we will certainly see more weakness creeping in. The Markets are
certainly not out of the woods. Any profits on either side should be vigilantly
protected. Fresh positions should be taken ultra selectively. Overall, cautious
approach 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.