MARKET REPORT
July 16, 2013
The Markets had a volatile session yesterday, as such on
expected lines but it ended the day on modestly positive note after recovering
from the day’s lows. Contrary to expectation, the Markets opened on a negative
note and soon gave its intraday low of 5980.95 in the early minutes of the
trade. However, after this, the Markets kept on gradually recovering from this
low point and by afternoon trade, it traded flat. The Markets continued its
recovery from its day’s low and went into positive. It went on to give the day’s
high of 6038.20 by late afternoon trade. The Markets traded sideways for the
rest of the session maintaining the gains. It ended the day at 6030.80, posting
a modest gain of 21.80 points or 0.36% while forming a higher top and higher
bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
The Markets, even with the global markets trading flat to
mildly positive, are likely to see a negative opening today. This would be a
knee jerk reaction to the RBI’s announcement post market hours yesterday
wherein it recalibrated the Marginal Standing Facility at 10.25% to curb the
Rupee market volatility. This has put an end to any rate cut hope in the near
future.
For today, the levels of the 50-DMA, i.e. 5917 would act as
support. The Markets, if opens lower, and drifts lower, this would act as
support. However, this should be more of the knee jerk reaction to this
development.
The lead indictors continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 61.4857 and it has reached its highest
value in last 14-days which is bullish. It does not show any bullish or bearish
divergence. The Daily MACD continues to remain bullish as it trades above its
signal line.
On the derivative front, NIFTY has continued to add over
3.23 lakh shares or 1.83% in Open Interest.
Having said this, it is important to note that the Markets
have recovered over nearly 450-odd points after it made lows in the last week
of June after a brief consolidating period in between. The Markets were headed
towards it s pattern resistance of 6095-6100 wherein it were expected to
consolidate again. However, the RBI’s announcement is likely to put a break on
it midway and this would be a non-technical factor would affect sentiments for
the immediate short term and will send the Markets for a knee jerk reaction.
Overall, even with lower opening, it would be around its
important supports and there would be no breach on the technicals. Also, this
would be more like knee jerk reaction
for the short term. In such circumstances, the Markets do tend to defy
technicals, but ultimately the technicals tend to take over. There are chances
that the Markets either trades sideways post opening or might improve a bit as
well. We strictly advice you to avoid shorts if the Markets open lower. Any dip
should be utilized to make selective purchases as selective out performance
would be seen. However, cautious outlook
is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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