MARKET REPORT
July 08, 2013
The Markets had a day of consolidation on Friday wherein it
opened higher but pared partial gains to still end the day with modest gains
.The Markets opened on a positive and higher note and gave its intraday high of
5900.45 in the very early minutes of the trade. Thereafter, the Markets spent
most of the session in a sideways trajectory. Markets spent half of the session
moving nowhere after opening around these levels. However, in the second half,
it pared some of its gains. However, most part of the session was spent in a narrow 25-odd points range. Though the Markets pared some of its gains,
it was never weak during any part of the session. It finally ended the day at
5867.90 posting a modest gain of 30.95 points or 0.53%.
MARKET TREND FOR TODAY
Today, the global Markets are trading weak. This will have
its toll on our consolidating markets and therefore, expect the Markets to open
on a lower note and look for directions. However, the opening levels would be
again around its 100 and 200-DMA or little below that. It would be very
critically important that the Markets show some resilience post opening and the
behaviour vis-à-vis these two averages at Close would be very important.
For today, the levels of 5925 would continue to act as
immediate resistance and the levels of 5830 as 200-DMA would act as support at
Close levels. Further down, supports exists at 5760.
Lead indicators do not paint a weak picture at all. The RSI—Relative
Strength Index on the Daily Chart is 53.2021 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 Candles,
A rising window occurred (where the top of the previous shadow is
below the bottom of the current shadow).
This usually implies a continuation of a bullish trend. There have been 4 rising windows in
the last 50 candles--this makes the current rising window even more
bullish.
On the Weekly charts, RSI is neutral at 51.4943 and Weekly
MACD trades below its signal line but it is moving towards positive crossover.
On the derivative front,
NIFTY July futures have added yet another over 6.81 lakh shares or over
4.55% in Open Interest. This is certainly a positive sign and this figures
would lend cushion with any lower opening as this clearly show that longs were
added on Friday.
Having said this, it is important to note that our Markets
are consolidating and there is been no breach as such on the technical charts.
In such cases, if the Markets open lower, it usually shows resilience and
bounces or improves as we go ahead in the session or at least on the another
day. The lead indicators and the F&O data show no signs of any impending
immediate downside and the reading of weekly charts show that consolidation would
continue with an upward bias.
All and all, today, we might remain affected with global
weakness. However, as mentioned, resilience too is likely and the Markets would
continue to consolidate in a range. In such cases, defensives like IT and
Pharma can outperform. While shorts are advised to strictly avoided as there is
no structural breach on the Charts as yet, downside should be used to make
selective purchases. Positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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