MARKET REPORT
July 17, 2013
The steps taken by RBI of recalibrating the Marginal
Standing Facility (MSF) at 10.25% sent the Markets react negatively to it but
the Markets maintained the levels precisely as analysed in our yesterday’s
edition of Daily Market Trend Guide. The Markets opened on a negative note, but
made its intraday low of 5910.95 in the very early minutes of the trade. This
implied that the Markets took the support immediately on opening at its 50-DMA
which was 5914. Thereafter, the Markets traded more or less in upward rising
channel. Though the recovery was not at all steep, but it did improve gradually
bit by bit. The Markets came off almost 40-45-odd points off its opening lows.
It ended the day at 5955.25 posting a net loss of 75.55 points or 1.25% while
forming a sharply lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Yesterday we saw deviation of trend as compared to the
global markets as the Markets reacted to the RBI Announcements. However, today,
on the positive side, even with the Global Markets trading flat, we are likely
to see modestly positive opening today and some respite from the weakness that
we saw yesterday is certainly on cards. With no technical breach on the Charts
as yet, we are likely to recover some of the damage caused yesterday.
For today, the levels of 5960 and 6035 are immediate
resistance on the Charts. The supports come in at 5914 in form of 50-DMA and
further at 5880 levels.
All lead indicators still continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 55.9327 and it is neutral as it shows no
bullish or bearish divergence or any kind of failure swings. The Daily MACD is
bullish as it comfortably trades above the signal line.
On the derivative front, the NIFTY July Futures have shed
over 14.12 lakh shares or over 7.85% in Open Interest. However these are
unadjusted figures available from the exchange and the actual figures stands
much lower. However, shedding of OI is certainly reported and therefore, it
would be important to see that this should get replaced with fresh longs as
buying is expected to emerge at lower levels.
Overall, if we look at the technical charts, going by both
the lead indicators as well as pattern analysis, there is certainly no breach
on the patterns on the technical charts. The Markets continue to trade above
all of its 3 moving averages and there are chances that it carries on further
from here. It is not likely to see any dip below the levels of 50-DMA.
All and all, it would be important for the Markets to trade
above 50-DMA levels of 5914. It would be important to see the Markets not
breaching 5900-5915 levels or else some more short term weakness is likely to
creep in. However, there are fair chances of this being averted with stock
futures reported to have added over 2 Crores shares in OI. With some pressure
continuing on select stocks no major breach of any pattern or support is seen.
In such case, very selective purchases may be made and shorts should be
strictly avoided. Positive caution advised as there is no breach of any pattern
on Charts as of today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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