Monday, September 16, 2013

Daily Market Trend Guide -- Monday, September 16, 2013

MARKET REPORT                                                                        September 16, 2013
The Markets had an absolute flat session on Friday as it closed almost unchanged from its previous close after spending the session in a capped range and in bit volatile manner. The Markets opened on a negative note but in after opening and trading negative in the initial minutes of the trade, it went into positive territory to give the day’s high of 5884.30. After briefly trading near those levels it pared the recovered gains as it dipped into the red again to give the day’s low of 5822.90. While touching both of these levels in the morning trade, the Markets spent rest of the session in a extremely capped range. The Markets remained directionless throughout the session after this and headed no where. Severe consolidation was seen, on expected lines. It finally ended the day at 5850.60, ended the day virtually unchanged with net loss of 0.10% or 0.001% while forming a lower top and slightly higher bottom on the Daily High Low charts.


MARKET TREND FOR TODAY

The Markets have shown consolidation in last three trading session after unabated gain of over 600-odd points. While remaining in consolidation phase, the Markets have successfully kept itself above the levels of 200-DMA which is 5839 today. Today’s global cues suggest a strong gap up opening today but it would be crucial to see if it sustains after opening and therefore, the opening levels and the intraday trajectory that the Markets form would be critically important.

For today, the levels of 5930 and 5955 shall act as immediate resistance levels for the Markets. The supports come in at 5840 and 5775 levels.

The lead indicators continue to remain in place while being neutral. The RSI—Relative Strength Index on the Daily Chart is 59.9756 and it is neutral as it shows no bullish or bearish divergence or any failures wings. The Daily MACD continues to trade bullish, above its signal line. On the Candles, A Spinning Top occurred, which often indicates weariness at higher levels.

On the Weekly charts, RSI is 53.3513 and remains neutral with no divergences or any kind of failure swings. The Weekly MACD remains bearish as it trades below its signal line.
On the derivative front, NIFTY September futures have shed over 16.15 lakh shares or 8.53% in Open Interest. This is a clear indication that offloading has been seen at higher levels.

From what appears from the reading above, even if we see a strong opening following supportive global cues, the sustainability of the same would be very much in question. Given the consolidation and the F&O data inputs, it is very much likely that the Markets opens strong, but struggles maintaining those gains post opening.

All and all, caution still prevails in the air. The global cues and the F&O data throw contradictory signals. As mentioned, even with opening with gains, the Markets need to capitalize on those gains and therefore the intraday trajectory would b e very crucial. It is advised to make aggressive purchases post stronger opening but use the same to protect any existing profits at higher levels. Selective purchases maybe made as sectoral out performance may be seen. It is advised to continue to maintain a cautious outlook on the Markets.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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