MARKET REPORT
September 12, 2013
The Markets had a volatile session yesterday as it moved on
both sides to finally end the day flat with minor gains. Yesterday’s session
was that of consolidation after almost straight gains of over 600-odd points
for the Markets. The Markets opened on a negative note on expected lines but
after opening negative, it soon crawled back into the positive territory in the
first hour of the trade. However, at that time, some pressure was seen building
up as the Markets saw some expected profit taking. The Markets pared all of its
recovery and dipped into the negative. It further went on to give the day’s low
of 5832.70. The Markets took support on its 200-DMA. The second half saw a
sharp recovery from the lower levels. The Markets not only crawled back into
the green but gave its intraday high of 5924.35. It finally ended the day at
5913.15, posting a minor gain of 16.40 points or 0.28% while forming a slightly
higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets are likely to open again on modest gains but the
analysis for today remains more or less on similar lines like yesterday. The
Markets have risen over 600-odd points last week and there are very bright
chances that we are set for correction from higher levels on account of profit
taking. At least a consolidation cannot be ruled out. Intraday trajectory would
remain crucial.
For today, the levels of 5940 and 5970 would act as
immediate resistance levels for the Markets. The levels of 5837, which is the
200-DMA and further 5817-5800 which is the 100-DMA shall act as immediate
supports.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 63.1444 and it has reached its highest
value in last 14-days which is bullish. It does not show any bullish or bearish
divergence. The Daily MACD continues to trade above its signal line.
On the derivative front, NIFTY September futures have shed
over 10.23 lakh shares or 5.08% in open interest. This is the first indication
of tiredness in the Markets. This shows that Markets have got little weary and fatigued and some range bound
consolidation / minor correction cannot be ruled out.
Overall, the lead indicators continue to remain in place but
the F&O data clear show some fatigue in the Markets at higher levels. Further
to this, given the shedding of OI by over 5%, there are high chances that the
Markets pares its opening gains and we see some correction setting in to the
Markets. Possibilities of this cannot be ruled out and remain high.
All and all, we may see modestly positive opening but at the
same time the chances of correction from higher levels or account of profit
taking remains very high and cannot be ruled out. If not then consolidation
like yesterday remain imminent and given this fact, we advice not to create
fresh longs in aggressive manner while profits on open positions should be
protected. Volatility shall remain and cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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