Thursday, September 26, 2013

Daily Market Trend Guide -- Thursday, September 26, 2013

MARKET REPORT                                                                          September 26, 2013
The Markets continued with its consolidation as tested its both, 200 and 100DMA on the downside but ultimately saw some recovery to end the day with minor losses and also remain above its 200-DMA. The Markets opened on a modestly positive note and formed its intraday high of 5910.55 in the early minutes of the trade. The Markets traded briefly in the positive but thereafter lost ground to trade in the red. The Markets kept losing ground rapidly and went on to give the day’s low of 5811.10 in the afternoon trade. However, in the final hour and half of trade, the Markets saw some short covering from lower levels as it managed to recover some of its losses. It managed to came above its 200-DMA again and finally ended the day at 5873.85, posting a minor loss of 18.60 points or 0.32% while continuing to form a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we enter the expiry day of the current September derivative series and the session is bound to remain dominated with rollover centric activities. The analysis for today remains again on similar ground as the Markets continue to consolidate. We can expect a flat to modestly negative opening today and the behaviour of the Markets vis-à-vis its 200 and 100DMA would be crucial.  The intraday trajectory would continue to remain critically important.

For today, the levels of 5910 and 5935 would act as immediate resistance for the Markets. The levels of 5841 which is the 200-DMA and 5818 which is the 100-DMA would act as immediate supports. Any dip below these levels will bring in further weakness in the Markets.

The RSI—Relative Strength Index on the Daily Chart is 55.5916 and it remains neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD remains bullish as it trades above its signal line, but is moving towards giving a negative crossover in coming days. 

On the derivative front, reduction is seen in total Open Interest in NIFTY and Stock futures alike. Signifies that the spurt that we saw yesterday was totally rollover centric and was on account of short covering in the Markets. 

Given the pattern analysis and the F&O data, we are very much likely to see the Markets remain in consolidation phase for some time. This phase will keep the Markets in a  broad trading range with little weaker bias. As mentioned earlier, any dip below the 200 or 100DMA shall make the Markets weaker and the  levels of 6130 have become an immediate top for the Markets.

All and all, today we can fairly expect a range bound trade today. Along with being range bound, it is likely to remain volatile as well given the expiry day today. We continue to advise to remain highly selective in making fresh purchases. Both, short positions as well as any type of aggressive positions should be avoided as the Markets are yet to determine directional certainty. Overall,  continuance of cautious outlook is advised for today.

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


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