MARKET REPORT
August 29, 2013
The Markets had a terrible start yesterday as the currency
continued to melt but the Markets showed equally sharp recovery on expected
lines as it ended the day just flat after recovering over 198-odd points from
its day’s low. The Markets opened the day on a negative note and after trading
negative for a while, plunged to its day’s low of 5118.85 in the morning trade.
The Markets breached its important support at that time. However, the second
half of the session saw the Markets making equally sharp recovery. It transformed
itself into rising trajectory and not only recovered all of its losses but went
to the extent of trading in to the green giving the day’s high of 5317.70
recovering over 198-odd points from its lows. It finally ended the day at 5285 after coming
off a bit while ending the day flat with net loss of 2.45 points or just 0.05%
while forming a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, we can fairly expect the Markets to open on a
positive note and continue with the up move. The Markets are expected to open positive
and continue with its recovery, at least in the initial trade. Today being the
expiry day of the current derivative series, the session would certainly remain
dominated with rollover centric activity and this may keep the Markets either
range bound or volatile.
The levels of 5360 and 5425 shall act as immediate
resistance for the Markets. The levels of 5215-5200 would continue to remain
and act as important pattern support.
As mentioned in our yesterday’s edition the lead indicators
continue to show some likelihood of resilience from the Markets. The RSI—Relative
Strength Index on the Daily Chart is 33.0504 and it does not show any failure swings.
The NIFTY has formed its new 14-day low but RSI has not and this is Bullish
Divergence. The Daily MACD continues to trade below its signal line.
On the derivative front, the NIFTY has shown net addition in
total open interest. Even decent rollover has been reported in NIFTY and
Marketwide segment as well. Today is the expiry day and we would continue to
see the rollovers happening as well.
Having said this, it is important to note that the Markets
will continue to remain effected by the factors listed in our yesterday’s
edition of Daily Market Trend Guide, which are NOT technical factors. However,
we would continue to see resilience from the Markets near 5215-5200 levels as
any breach would give a self contradictory reading on the Daily Charts. As
mentioned in our yesterday’s edition, any breach below those levels would be a
negative break down but would go on making the Markets “Oversold” at the same
time.
All and all, the Markets are expected to continue with its
up move at least in the initial trade. It is advised to refrain from creating
shorts even if we see some minor profit taking later in the session. Any
weakness would offer a good opportunity to enter at lower levels. In event of
the currency stabilizing, we will see continuation of a strong up move.
Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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