MARKET REPORT
August 14, 2013
Yesterday’s session remained that of a pleasant recovery
session for the Markets as the Markets opened on a negative note but then went
on to add gains one way and ended the day on a fairly stronger note. The
Markets opened on a negative note and formed its intraday low of 5578.90 in the
very early minutes of the trade. The Markets formed a upward rising channel
thereafter and remained in rising trajectory for the rest of the session as it
kept gradually making new highs. This continued for the entire session as the
Markets rose over 125-odd points from its opening lows. The Markets went on to
give its intraday high of 5704.75 and maintained those levels till the end. It finally
ended the day at 5699.30, posting a robust gain of 86.90 points or 1.55% while
continuing to make a higher top and higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today, after posting there days of up move, the Markets are
expected to take little breather and open on a mildly negative to flat note and
look for directions. There is nothing on Charts to indicate a downward move and
the Markets have some room more to move up and continue with its recovery.
However we have a truncated week with tomorrow being a holiday and we might see
some minor profit taking happening.
For today, the levels of 5730 and 5765 are immediate
resistance on the Charts. The supports come in much lower at 5650 an 5635
levels.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 44.7630 and it is neutral as it shows no
bullish or bearish divergence or any kind of failure swings. The Daily MACD
trades below its signal line and is bearish but is attempting to move towards a
positive crossover in coming days if the Markets maintain these levels.
On the derivative front, the NIFTY August futures show
shedding of over 8.48 lakh shares or 5.80% of Open Interest. This remains a
negative reading as it signifies that the rise has been due to massive short
covering from lower levels and not a fresh buying. However, on the other end,
the stock futures show total addition of over 1 Crores shares in Open Interest.
Given the above reading, it clearly shows that the reading
of the technical indicators and the F&O data is not in sync and it deviates
from each other while keeping the bias on the continuation of up move. With the
lead indicators in place, the chances of the Markets resuming its downward
journey is less likely. On the other hand, it would be important to see that
the up moves that are occurring due to short covering should get replaced with
fresh buying.
All and all, given the deviation in the reading of technical
indicators and the F&O data, there are chances that the Markets remains and
trades in a capped range and consolidates a bit before it continues with its up
move. There are no indications of the Markets resuming its downward move and
therefore, shorts should strictly be avoided. Given the truncated week, capped
movement or minor profit taking can be expected, however, the overall bias
remains bullish and on upside. Positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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