MARKET REPORT
September 02, 2013
The Markets had a sea saw like session on Friday as remained
very volatile throughout the session but finally ended yet another day with
smart gains. The Markets opened on a negative note but slowly crawled into the
positive territory. The Markets traded with decent gains in the morning trade
however it saw sharp paring of gains in the early afternoon trade. The Markets
pared its morning gains, traded flat and dipped further into the red to give
the day’s low of 5360.20. The last hour and half of the trade showed a very
smart recovery in the Markets. The Markets came off its lows, and trade back
into the green. It also went on to give its day’s high of 5493.30, rising over
130—odd points from the day’s low. It finally ended the day at 5471.80, posting
yet another gain of 62.75 points or 1.16% while continuing to form a higher top
and higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
The Markets have risen over 375 points from the day’s low
made on August 28th until Friday. We have also mentioned in one of
our past editions of Daily Market Trend Guide that the levels of 5500-5520
shall act as immediate resistance as that is the support the Markets broke on
its way down. Today, we are likely to see flat opening in the Markets and we
may see the Markets consolidating again at these levels. Minor chances of
profit taking cannot be ruled out.
For today, the levels of 5500-5520 shall act as immediate
resistance for the Markets. The supports exist at 5440 and 5390 levels.
The lead indicators maintain a steady reading. The RSI—Relative
Strength Index on the Daily Chart is 45.0281 and its shows no bullish or
bearish divergence or any kind of failure swings and it is therefore neutral.
The Daily MACD was now reported a positive crossover and it is now bullish as
it now trades above its signal line.
On the Weekly Charts, RSI is 38.2025 and it is neutral as it
shows no negative divergence or a failure swings. The Weekly MACD however,
continues to trade below its signal line and is therefore bearish.
On the derivative
front, NIFTY September Futures have further went on to add over 26.64 lakh
shares or 18.18% in Open Interest.
Given the above reading, if we do not consider pattern
resistance of 5500-5520 levels, we can safely assume that the Markets are all
set and poised for a further up move. However, the levels mentioned are
important pattern resistance levels and cannot be ignored. Even if all lead
indicators and F&O data suggest continuation of up move, it is advised to exercise
caution around these levels. Markets may continue with its up move but would at
least see some minor profit taking or consolidation around these levels.
All and all, all indicators are suggesting continuation of
up move, but given the rise of over 375 points from the lows of 28th
August, and the pattern resistance levels of 5500-5520 in the vicinity, it is strongly
advised to exercise caution around these levels as the possibility of a minor
correction or profit taking or at least some consolidation cannot be ruled out.
The session may remain volatile and thus purchases maybe made very selectively
while protecting profits at higher levels.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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