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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