Thursday, July 11, 2013

Daily Market Trend Guide -- Thursday, July 11, 2013

MARKET REPORT                                                                                             July 11, 2013
What it seemed to be a stable session with some modest gains for the most part of the day, fizzled out in the second half as the Markets gave up to end the day with modest losses. The Markets opened on a modestly positive note in line with its Asian peers and gave its intraday high of 5879.35 in the very early minutes of the trade. The Markets came of a bit  after that and continued to trade in 20-odd points capped range until half of the session moving in and out of negative territory. However, the Markets saw some pressure building in last one and half hour of the trade as the Markets suddenly pared its opening modest gains. It dipped into the negative again and went on to give the day’s low of 5802.85. It ended the day at 5816.70 after a modest recovery with a net loss of 42.30 points or 0.72% while forming a higher top and lower bottom on the Daily High Low Charts.


 MARKET TREND FOR TODAY

Today, expect a strong and gap up opening in the Markets today and expect the Markets to open and trade near the upper levels of the trading range that it has been trading in. The opening levels are expected to be around its 50-DMA of 5917 today. It would be important to see the behaviour of the Markets post opening and the sustenance of the opening gains would be crucial to continue with trend reversal attempt after recent lows.

For today, the levels of 5915 and 5940 shall act as immediate resistance on the Daily Charts. The supports come in at 5835 and 5780 at Close levels.

The lead indicators continue to remain firmly in place. The RSI—Relative Strength Index on the Daily Chart is 49.66 and it is neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD is bullish as it continues to trade above its signal line.

On the derivative front, NIFTY July futures have added 78,450 shares or nominal 0.51% in Open Interest. This if we look form one angle, suggest that though no major shorts were created yesterday, no long unwinding was done either. This is more of a neutral reading on the derivative front.

Overall, as mentioned in our yesterday’s edition of Daily Market Trend Guide, there is severe positive consolidation going on in the Markets after it pulled back over 300-odd points after making recent lows. This has made the Markets healthier and has set the stage of confirmation of successful trend reversal going ahead. After today’s strong opening, the Markets will have to sustain at those levels without paring much gain. It would need to capitalize on the strong opening that it is set to get. It will then set the stage of successful trend reversal going ahead.

All and all, with the strong and gap up opening expected, the Markets are moving towards breaking out of the broad trading range that it has been trading after the pullback from recent lows. Creating shorts, even at higher levels is not advised as the Markets prepares itself for possible trend reversal confirmation. Any profit at higher levels should be vigilantly protected and fresh purchases may be made selectively on any dips. Overall, positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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