MARKET REPORTB
July 05, 2013
The markets had a volatile session yesterday, but it traded
precisely in line with what was analysed as it ended the day with decent gains
and resisted around its 100-DMA levels. The markets opened on a modestly
positive note on expected lines and went on to trade with decent gains rising
steadily in upward rising trajectory. In the afternoon trade, the Markets suddenly
pared most of its gains as it came off from its day’s highs. However, it saw
recovery again from those lower levels. In the last hour and half of trade, the
Markets not only recovered all of its gains but also gave its intraday high of
5848.20. It managed to hang on to those levels and finally ended the day at
5836.95, posting a decent gain of 66.05 points or 1.14% while forming a higher
top and higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today, we can fairly expect the Markets to open on a
modestly positive note yet again and continue with its up move. The opening is
likely to be above the levels of its 100-DMA and therefore this level would act
as support. It would be critically important for the Markets to remain in
rising trajectory and build up on opening gains in order to continue with its
attempt of trend reversal.
For today, the levels of 5890 and 5923, which is the 50-DMA
for the Markets are likely to act as immediate resistance. The supports would
come in at 5844 and 5830 which are the 100 and 200-DMA for the Markets. Below that
the supports come in at 5760 levels.
The lead indicators point towards continuing up move. The
RSI—Relative Strength Index on the Daily Chart is 51.3418 and it is neutral as
it shows no bullish or bearish divergences or any failure swings. The Daily
MACD remains bullish as it continues to trade above its signal line.
On the derivative front, NIFTY July futures have added over
2.12 lakh shares or over 1.44% Open Interest. Though this figure in nominal it
is important because yesterday, NIFTY had reported reduction in open interest.
With these figures showing addition in Open Interest, we can safely assume that
fresh longs have been added and initiated.
Overall, the undercurrent remains intact so long as NIFTY
trades above its 200-DMA. Any close along with volumes would imply a failure to
reverse the trend. However, until that happens, we have fair chances of this up
move continuing and the Markets continuing to reverse its trend after recent
lows.
All and all, with the positive opening expected, the two
DMAs mentioned above shall act as intraday support and the up move shall
potentially continue in the immediate short term. It is advised to make fresh
purchases selectively in any temporary downside / weakness that we see while
shorts should be strictly avoided. Overall, positive outlook is advised for
today as undercurrent remains intact.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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