MARKET TREND FOR TODAY.
The Markets suffered from gross overreaction on Friday as it had one of the worst sessions in recent past as it ended the day with loss of 234.45 points or 4.08%.
It is MORE THAN EVIDENT that the the Markets have grossly over reacted and misinterpreted the RBI's measure to control volatility in the currency markets. The measures are seen more as steps to bring the capital controls back which were gradually lifted since 2004.
Today we might see some modestly negative opening or some opening nervousness in the Markets but the Markets have ended near their important double bottom support again. All the recovery that was seen in last 4 sessions was wiped off in a day and that has happened, in our opinion, is STRONG defiance of technical indicators.
Today, the RSI on Daily Charts stands at 35.66 and it shows as bullish divergence as the RSI has not reported a 14-day low but the Nifty has done so.The same scenario is seen on the Weekly Charts as well.
On the Derivative front, the Nifty futures have added 27.12 lakh shares or a massive 18.27% in open interest which shows massive build up of short positions.
If technical indicators are to be relied upon, we would very clearly advice the retail traders and investors to refrain from active participation in the Markets. Shorts should be definite avoided. Fresh long positions should be taken ONLY IF liquidity permits or else liquidity should be maintained to protect current open positions.
Milan Vaishnav,
Consulting Technical Analyst,
WWW.MyMoneyPlant.co.in
+91-98250 16331
The Markets suffered from gross overreaction on Friday as it had one of the worst sessions in recent past as it ended the day with loss of 234.45 points or 4.08%.
It is MORE THAN EVIDENT that the the Markets have grossly over reacted and misinterpreted the RBI's measure to control volatility in the currency markets. The measures are seen more as steps to bring the capital controls back which were gradually lifted since 2004.
Today we might see some modestly negative opening or some opening nervousness in the Markets but the Markets have ended near their important double bottom support again. All the recovery that was seen in last 4 sessions was wiped off in a day and that has happened, in our opinion, is STRONG defiance of technical indicators.
Today, the RSI on Daily Charts stands at 35.66 and it shows as bullish divergence as the RSI has not reported a 14-day low but the Nifty has done so.The same scenario is seen on the Weekly Charts as well.
On the Derivative front, the Nifty futures have added 27.12 lakh shares or a massive 18.27% in open interest which shows massive build up of short positions.
If technical indicators are to be relied upon, we would very clearly advice the retail traders and investors to refrain from active participation in the Markets. Shorts should be definite avoided. Fresh long positions should be taken ONLY IF liquidity permits or else liquidity should be maintained to protect current open positions.
Milan Vaishnav,
Consulting Technical Analyst,
WWW.MyMoneyPlant.co.in
+91-98250 16331
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