MARKET TREND FOR TODAY
June 04, 2013
The Markets continued to correct yesterday on expected lines
as it opened on a flat note but remained in falling channel throughout the day
and ended the day with losses. The Markets opened on a flat note and gave its
intraday high of 6011 in the early minutes of the trade while it traded in
positive for a very brief moment. Thereafter, the Markets transformed itself
into falling trajectory and remained in falling channel throughout the day. For
the entire session, it continued to drift lower and did not show any strength
or attempted any recovery during the day. Markets went on to give the intraday
low of 5916.35 towards the end of the day. Though it remained in falling
channel after forming a downward trajectory, it did attempt a very minor
recovery as it came of its lows little bit and it ended its day at 5939.30,
posting a net loss of 46.65 points or 0.78% while continuing to form a lower
top and lower bottom on the Daily High Low Charts.
Today also, the Markets are likely to remain in corrective
mood. They are expected to open on a flat to mildly negative note and look for
directions. The Markets have tested its pattern support yesterday and even
drifted a bit below that. If some correction persists in the Markets today, it
is likely to go ahead and test its 100-DMA which is 5897. Intraday trajectory
would be crucial today to see if the Markets continue with its corrective
activities.
For today, the levels of 5965 and 5980 shall act as
immediate resistance for the Markets. The supports come in at 5897 which is the
100-DMA for the Markets and further down at 5867 which is the 50-DMA for the
Markets.
The lead indicators continue to throw bearish signals on the
Daily Charts and the bias remains on the downside. The RSI—Relative Strength
Index on the Daily Chart is 44.8378 and it has reached its lowest value in last
14-days which is bearish. It does not show and bullish or bearish divergence.
The Daily MACD continues to remain bearish as it trades below its signal line.
On the derivative front, NIFTY June futures have continued
to shed over 13.65 lakh shares or 8.99% in Open Interest. This certainly
continues to be a very bearish indicators as it very clearly suggests that
offloading / unwinding of long positions continues in the Markets and no shorts
have been created that can support the Markets statistically later. The NIFTY
PCR stands at 0.98 as against 1.04.
Overall, if we go by the F&O data, the correction should
certainly continue in the Markets. However, given the technical supports of
100-DMA and 50-DMA in the range, in case of correction, the Markets may find
support at these levels. However, given the overall reading, the undertone
continues to remain bearish.
To sum up, the immediate indicators and F&O data reading
clearly suggests continuation of bearish mood and corrective activities in the
Markets. It is advised not to create any aggressive long positions given this
reading. However in case of continuing downside, if the Markets approaches any
of the DMAs mentioned above, these downside should be utilized to book profits
in the short positions and profits, thus, should guarded. Overall, neutral to
mildly negative outlook on the Markets is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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