MARKET REPORT
August 21, 2013
The Markets ended the day yesterday on a very minor loss
spending the entire session in a recovery mode after a scary start. The Markets
opened on a very scary note as it opened almost over 100-odd points gap down.
It opened gap down and made its day’s low of 5306.35 in the very early minutes
of the trade. It came since then in a recovery mode and until mid day trade
recovered almost over100-odd points to trade near the previous closing levels, giving
intraday high of 5417.80. The Markets remained sideways until late afternoon
trade and thereafter pared some of its gains. It recovered again from those
levels and finally ended the day at 5401.45, posting a nominal loss of 13.30
points or 0.25% while continuing to form a lower top and lower bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets are expected to continue to remain in recovery
mode and see a relief rally today. Expect the Markets to open on a positive
note and continue with the up move, at least in the opening trade. The sustenance
the opening gains would be crucial. This positive opening and the likely
sustenance can be attributed to the technical indicators which are almost
Oversold and also to the RBI announcements that can bring some positive
sentiments back.
For today, the levels of 5470 and 5525 are immediate
resistance on the Charts. The supports come in at 5360 and 5310 levels.
The lead indicators continue to remain almost oversold and
show a positive bias towards recovery. The RSI—Relative Strength Index on the
Daily Chart is 31.6420 and it does not show any failure swings. The NIFTY has
reached its lowest value in last 14-days but RSI has not. This is Bullish
Divergence. The Daily MACD continues to trade below its signal line and is
moving towards oversold territory.
On the derivative front, NIFTY August futures have added
over 16.02 lakh shares or 8.35% in Open Interest. This is a very good sign as
it signifies that the yesterday’s pullback has been with fresh buying and not
just because of short covering. In Stocks, total OI has been added by over 3.5
crores shares.
The Markets have behaved almost in line with what was analysed
in our yesterday’s edition of Daily Market Trend Guide. Today as well, the
analysis remain more or less on similar grounds. The Markets which are nearly
oversold will attempt a pullback. It did so yesterday and today is likely to
continue with that with the lead indicators showing a positive bias. The
immediate travel for the Markets can be up to the double bottom support that it
broke on the down side.
All and all, relief rally is likely to day. As mentioned
earlier, sustenance of the opening gains would be crucial. We would still advice
to exercise caution while make fresh purchases as the Markets are attempting a
pullback but has not confirmed any trend reversal. Such trend reversal can be
confirmed after few trading session ahead. It is also advised to cover shorts
wherever they exists at cost and adequate liquidity should be provided for to
protect current positions. Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.