MARKET REPORT
July 26, 2013
The Markets settled the expiry yesterday with a significant
cut, but the levels remained more on less on expected lines. The Markets opened
modestly negative as expected and gave its intraday high of 5990.65 in the very
early minutes of the trade. The Markets remained in falling trajectory
throughout the session. It continued to drift on the downside for the entire
session and towards the end went on to
give the day’s low of 5896.40. No major recovery was seen but the levels
of 50-DMA have worked out to be resistance as expected yesterday. It finally
ended the day at 5907.50, posting a net loss of 83 points or 1.39% while
forming a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
As evident from the Charts, the Markets have still not
breached any significant resistance levels. Today, expect the Markets to open
on a moderately positive note and look for directions. The intraday trajectory
that the Markets form after opening would be crucially important because it
would hold out the levels of 50-DMA as a immediate support for the Markets.
For today, the levels of 5990 and 6035 are immediate
resistance levels on the Charts. The levels of 5905, which is the 50-DMA and the
5859 / 5851 which are the 100 and 200-DMA of the Markets are likely to act as
strong supports for the Markets at close levels.
The RSI—Relative Strength Index on the Daily Chart is
49.1167 and it has reached the lowest value in last 14-days which is bearish.
Also, RSI has made a new 14-day low but NIFTY has not and this is bearish
divergence as well. However, given this, the Daily MACD is still continuing to
remain bullish as it trades above it signal line.
On the derivative front, the NIFTY has reported rollovers in
line with the previous months and the August series have reported a massive
open interest addition of over 32.95 lakh shares or 22.40% in open interest.
This very clearly signifies that there has been huge addition of shorts in last
two days of trade.
Having said this, even with there is some weak signals on
RSI, the Daily MACD continues to remain bullish, at least as of today. Further
to this, the derivative data too shows huge addition of open interest numbers.
Given all this, there are chances that we might see some relief rally today.
However, it would be important for the Markets to remain above the levels of
50-DMA and for this the intraday trajectory would remain crucially important.
All and all, we are likely to see a relief rally and we
might see the Markets attempting a pullback and continuing with it trend
reversal. There are mix signals on the lead indicators but the bias remains
tilted on the positive supported by derivative figures. It would be important
for the Markets to remain above its DMAs. With no structural breach on the
Charts even as yet, shorts should still be avoided and once can continue making
selective purchases. Overall caution, with mild dose of positive optimism is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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