MARKET REPORT
September 30, 2013
After consolidating for couple of sessions and managing to
keep its head above 200-DMA for couple of days, the Markets finally corrected
in the last hour and half of the session on Friday. The Markets opened on a
modestly positive note as it gave its intraday high of 5909.20 in the very
early minutes of the trade. After trading briefly in the positive, the Markets
slipped into the red. The Markets spent the most part of the session trading in
a range of 30-odd points in the negative territory. However, in the last hour
and half of the trade, the Markets slipped further and tested both of its DMAs
as it gave its intraday low of 5819.30. It finally ended the day at 5833.20, posting
a net loss of 49.05 points or 0.83% while forming a lower top and lower bottom
on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets have closed a notch
below its 200-DMA. Today, it is likely to see a negative opening and this is likely
to see the Markets opening well below its 200DMA and 100DMA and given this,
these levels would become resistance for today. Intraday trajectory would be
crucial to see if the Markets recovers after opening lows but otherwise, the
charts suggests that the correction in the Markets would continue.
For today, the levels of 5841 and
5875 would act as immediate resistance levels for the Markets. The supports
exist lower at 8790 and 5750 levels.
The RSI—Relative Strength Index on the Daily Chart is
53.1311 and it has just reached its lowest value in last 14-days which is
bearish. It does not show any bullish or bearish divergence. The Daily MACD
trades above its signal line but it is moving towards reporting a negative
crossover. On the candles, An engulfing bearish line occurred (where a black candle's
real body completely contains the previous white candle's real body). The engulfing bearish pattern is
bearish during an uptrend (which appears to be the case with NIFTY). It then signifies that the momentum may be
shifting from the bulls to the bears.
On the weekly charts, RSI is 51.5670 and it remains neutral with
no failure swings or any divergences.
The Weekly MACD remains bullish as it trades above its signal line but
this too is moving towards reporting a negative crossover.
On the derivative front, NIFTY October Futures have shed over 1.54
lakh shares or 0.85% in open positions. This signifies that there has been
offloading of positions and no significant amounts of shorts have been added.
Given from all the readings above, i.e. taking the pattern
analysis read along with F&O data and lead indicators, the Markets are more
likely to see continuation of corrective actions in the Markets. The Markets
are likely to see itself drop below 200DMA and 100DMA and it is likely that
these levels act as resistance later on. The chances of the Markets testing the
levels of 50-DMA which is 5713, cannot be ruled out if the weakness persists.
All and all, the Markets are set for negative opening today and
given this, it is recommended to wait before initiating any fresh positions
today. Unless the directional bias gets determined, shorts should be avoided.
Selective purchases may be made as selective sectoral out performance would be
clearly seen. Overall, continuation of modestly positive outlook without any
over exposure in the Markets is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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