MARKET TREND FOR TODAY
July 25, 2013
The Markets had a bad session yesterday as it once again
reacted to the RBI announcements of steps to be taken to curb the rupee
volatility. There is total negative knee jerk reaction from the Markets once
again to this as it opened on a lower note and weakened further to end the day
with a deep cut. The Markets opened on a negative note and remained negative
for the entire session. After opening negative, the Markets traded sideways
with capped losses. However, in the afternoon trade, it gave up further as it
went on to give the day’s low of 5962.60 by mid session. However, very minor
recovery was seen from this level towards the end. The Markets finally ended the day at 5990.50,
posting a net loss of 87.30 points or 1.44% while forming a sharply lower top
and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today as well, expect the Market to open on a modestly
negative note and look for directions. Today is the expiry day of the current
derivative series and are all set the see the session remain highly dominated
with rollover activities. Especially today, the intraday trajectory that the
Markets form would be critically important to decide the trend for today.
The levels of 6050 and 6075 are immediate resistance on the
Charts. The support come in at its 50-DMA of 5910.
All lead indicators continue to remain in shape. The RSI—Relative
Strength Index on the Daily Chart is 55.0801 and it is neutral as it shows no
bullish or bearish divergences or failure swings. The Daily MACD continues to
remain bullish as it trades above its signal line.
On the derivative front, though we are on the expiry day
today, the rollovers until yesterday have been reported in line with
expectations and were decent. Both NIFTY and Stock futures have continued to
add in total open interest. In yesterday’s session, significant amount of
shorts were seen added in the system.
At this juncture, it is important to note that the Markets
reacted last time couple of days back to RBI’s announcement of calibration of
MSF at 10.25% and that proved to be a
knee jerk reaction as it returned to those levels after a sharp recovery. This
time as well, similar amount of shorts are being added and a pullback cannot be
ruled out either today or tomorrow.
All and all, there has been no structural breach on the
Charts as of today. Today’s expiry session may keep the session volatile but
with the huge shorts being reported again, there are very fair chances that we
see the Markets improving as we go ahead in the session. If not today, pullback
incoming days just cannot be ruled out. We continue to reiterate to spot
selective buying opportunities with any downtick. Shorts should be avoided. Cautious
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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