MARKET REPORT
June 26, 2013
The Markets had a very volatile session yesterday as it
opened on a flat note, showed good recovery and also pared its gains towards
the end though it ended the day with modest gains. The markets opened on a flat
note and after trading briefly in a capped range gave its day’s low of 5570.25
in the morning trade. However, in the late morning trade, the Markets perked up
further. In the second half of the session, the Markets continued to show some
strength. It went on to give the day’s high of 5666.25, rising some 95-odd
points from its day’s low. However, in the last hour and half of the trade this
recovery did not sustain as fresh shorts were built up again. This lead to
paring of gains by the Market. It finally ended the day at 5609.10, posting a
modest gain of 18.85 points or 0.34% while forming a higher top and similar
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today’s analysis remains more or less similar again as the
Markets consolidated yesterday. Today, we enter the penultimate day of expiry
of current derivative series and the session would continue to remain dominated
with rollover centric activities. Expect the Markets to open on a modestly
positive note and look for directions. The intraday trajectory would be crucial
and the Markets will have to trade above its pattern support to avoid any
further weakness.
For today, the levels of 5650 and 5680 shall continue to act
as immediate resistance on the Charts. The Supports come in at 5570 and 5545
levels.
The lead indicators continue to remain neutral to mildly
bullish. The RSI—Relative Strength Index on the Daily Chart is 32.7164 and it
is neutral as it shows no failure swings or any kind of bullish or bearish
divergence. The Daily MACD continues to remain bearish as it trades below its
signal line.
On the derivative front, NIFTY futures have continued to add
over 8.5 lakh shares in Total Open Interest as it showed heavy rollover
activities and also creation of fresh shorts. Similar trend was observed in
Stock Futures an Bank Nifty as well.
Having said this, since we are into expiry days, there are
chances that Markets continue to remain volatile as we saw yesterday. However,
so long as it continues to trade above its pattern support that exists in form
of Double Bottom, the stability is expected to exist in the broader markets.
The intraday trajectory would continue to remain critically important.
Overall, the Markets are expected to open modestly positive
and trade in a range. There are all chances that it remains volatile due to
rollover centric activities. However due to huge amounts of shorts that exist
in the system, we continue to advice on similar lines. No shorts should be
initiated and any dips should be used to make very selective purchases as the
existing shorts may act as support anytime at these levels. Also, if required,
liquidity should be preserved to maintain existing positions. Overall, positive
caution is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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