MARKET REPORT
August 16, 2013
The Markets continued its up move and ended positive for the
fourth day in a row as it perked up in the second half after a capped morning
session. The Markets opened on a flat to mildly positive note and after trading
positive, dipped in the negative territory in the early minutes of the trade to
give the day’s low of 5690.20. The Markets attempted to recover in the morning
session and traded modestly positive but soon pared its gains to trade flat.
The Markets pared gains after a brief recovery again by afternoon trade.
However, in the second half, the Markets attempted an up move again and this
time, sustained it as well. It went on to give the day’s high of 5754.55
towards the end of the session and finally ended the day at 5742.30, posting a
net gain of 43 points or 0.75% while continuing to form a higher top and higher
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
We have had a trading holiday yesterday on account of Independence
Day and therefore, today’s market opening would be more or less in adjustments
to what happened yesterday in the Global Markets. However, the opening would be
flat to modestly negative but all technical factors and the F&O data
indications remain intact to suggest that the session would be more or less
range bound with a up ward bias.
For today, the levels of 5760 and 5810 would be immediate
resistance on the charts. The supports come in at 5690 and 5655 levels.
All lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 48.0243 and it is neutral as it shows no
bullish or bearish divergence or any kind of failure swings. The Daily MACD
continues to trade below its signal line.
On the derivative front, the NIFTY August futures have added
over 11.19 lakh shares or 8.12% in Open Interest. This is a very important
indicator as for the last three days of rise, the NIFTY had risen while
shedding Open Interest. While on Wednesday, the Markets have risen while adding
Open Interest. This clearly suggest and signify that on Wednesday, the Markets
have risen due to fresh longs being added and not because of mere short
covering.
To conclude, today’s session would remain more or less in
adjustment to what happened in the Global Markets while we were shut yesterday.
However, this is likely to keep the Markets little volatile and range bound but
no possibility of major downside is seen given the reading of the lead
indicators as well as the F&O data. We may see minor profit taking or some
amount of volatility but no serious threat to the up move that is being
witnessed.
All and all, the reading remains more or less like that of Wednesday.
Markets may see minor profit taking or some amount of volatility but the overall
trend remains intact given reading of the lead indicators and the derivatives
data. It is advised to continue to refrain from creating shorts. Existing
positions may be maintained and profits be protected at higher levels. Selective
out performance would continue. Overall, heavily stock specific approach with
caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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