MARKET REPORT September 03, 2013
The Markets had a decent session yet again as it continued
its up move while moving past its pattern resistance levels as it ended the day
yet again with decent gains. The Markets opened on a positive note and traded
with modest but capped gains in the morning session. The Markets saw some
strength coming in the second half of the session as it managed to move past
the pattern resistance levels mentioned in our yesterday’s edition of Daily
Market Trend Guide. It went on to give the day’s high of 5564.90 in the
afternoon session. The Markets managed to maintain those levels in the last
hour and half as it traded sideways and in a capped range once gain. It finally
ended the day at 5550.75, posting a net gain of 78.95 points or 1.44% while
continuing to form a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today as well, expect the Markets to open on a modestly
positive note and look for directions. However, we once again point out that
the Markets have risen over 445-odd points from the lows made on August 28th
and this is getting little jittery. There are strong chances that the Markets
consolidates but maintains levels above 5500 in coming session, while keeping
the overall trend certainly intact.
For today, the levels of 5564 and 5620 are immediate
resistance levels on the Charts. The supports come in at 5500 levels.
The lead indicators certainly suggest the trend to remain
intact in coming sessions. The RSI—Relative Strength Index on the Daily Chart
is 49.3573 and it has reached its highest value in last 14-days which is
bullish. Also, the RSI has made a new 14-day high but NIFTY has not and this is
a Bullish Divergence. The Daily MACD continues with its positive crossover and it
currently bullish as it now trades above its signal line.
On the derivative front, the NIFTY September futures have
added over 7.16 lakh shares or 4.14% in Open Interest. This signifies
continuation of creation of longs and the rise cannot to attributed to any kind
of short covering.
Given the above reading that the Markets have moved past its
pattern resistance levels of 5500-5520 yesterday, the lead indicators showing
continuing bullish momentum and the Markets making a positive crossover on
Daily MACD certainly suggests the continuation of up move in the immediate
short term. However, along with this, we also have to bear in mind the one-way
rise of over 445-odd points since lows of August 28th and this may
make the Markets see some range bound consolidation.
All and all, we can expect the up move to continue in the
immediate short term. However, due to the reasons cited, we cannot rule out
some minor profit taking from higher levels or some range bound consolidation
taking place. However, until the Markets maintains levels above 5500, the trend
would remain in tact. Very selective purchases may be made while protecting
profits at higher levels.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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