Friday, August 23, 2013

Daily Market Trend Guide -- Friday, August 23, 2013

MARKET REPORT                                                                                        August 23, 2013
The Markets had a strong spell of short covering led recovery in the second half of the session as the Markets ended on a strong note after a weak first half. The Markets opened on a negative note and made its intraday low of 5254.05 in the early minutes of the trade. The Markets however recovered to trade flat but did not make any definite headway as it kept moving in and out of the green. The Markets spent the first half of the trade in this fashion. In the second half, from afternoon trade onwards, the Markets showed some stronger attempt to move up. It went on to trade positive and as the session progressed, went on to give the day’s high of 5418.95, moving almost over 160-odd points from its day’s low. These levels were sustained until the end and the Markets ended the day at 5408.45, posting a strong gain of 105.90 points or 2% but still making a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to open on a flat note and look for directions. Apart from the domestic factors that may continue to affect the Markets, the global markets continue to paint a stable picture this morning. The intraday trajectory would be critical for today post opening. Any gains made, would required to be sustained to built up on the attempt of recovery made yesterday.

For today, the immediate resistance levels for the Markets are 5490 and 5525 levels. Supports exist near 5360 and 5310 levels.

The lead indicators remain neutral. The RSI—Relative Strength Index on the Daily Chart is 36.1519 and it is neutral as it shows no bullish or bearish divergence or any failure swings and is therefore neutral. The Daily MACD is bearish as it continues to trade below its signal line. 

On the derivative front, NIFTY August futures have shed over 6.85 lakh shares or 2.83% in Open Interest. This signifies that short covering had some role to play in yesterday’s up move. As usual, we need to see the Markets get nervous again or we see some more fresh buying coming in at these levels.

Overall, the Markets just have no consensus so far as directional trend is concerned. On each working day it has been defying the technical indicators as well as the derivative data inputs. However, though this has made the recent sessions volatile we need to see if yesterday’s attempt to recover is continued and sustained today.

All and all, as just mentioned above, with the directional consensus not established as yet, even if the Markets trades near oversold levels, we would still advice retail traders / investors not to pile up any aggressive positions on either side. The reversal is attempted, but we need to see if the same is confirmed in coming days. Remaining light on positions while maintaining liquidity to protect open positions is advised for today along with maintaining cautious optimism for today.

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


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