MARKET REPORT September 24, 2013
Markets remained predominantly in correction mode yesterday
as it opened negative, remained in downward trajectory throughout the session
and ended the day with a deep cut. The Markets opened on a negative note on
expected lines and losing ground gradually and steadily. No where in the session
did it ever made even a feeble attempt to recover. The Markets kept losing
ground after making a falling channel and towards the end, went on to give the
day’s low of 5871.40. After a very modest recovery from its lows, it finally
ended the day at 5889.75, posting a net loss of 122.35 points or 2.04% while
continuing to form a sharply lower top and lower bottom on the Daily High Low
Charts.
MARKET TREND FOR TODAY
Today as well, the Markets are expected to open on a
modestly lower note and continue with its correction, at least in the initial
trade. However, 200-DMA, which is 5842 is likely to act as support. It would be
important to see the behaviour of the Markets vis-à-vis this level. If this
level is breached, some more weakness might creep in.
For today, the levels of 5925 and 5940 are immediate
resistance on the Charts. The support exist at 5842 which is the 200-DMA and 5819
which is 100-DMA of the Markets today.
The RSI—Relative Strength Index on the Daily Chart is
56.4831 and it shows no bullish or bearish divergence. It does not show any failure
swings as well and it is therefore, neutral. The Daily MACD still continues to
trade above its signal line.
On the derivative front, total NIFTY futures have reported
shedding of over 3.25% in total Open Interest. This is also reflected in stock
futures data as this has been result of the bleeding in the rate sensitive
stocks like Realty, Auto and Banks.
Given the above reading, the possibility of the Markets
opening on a modestly negative note and continuing with correction just cannot
be ruled out. There are fair chances that the Markets goes down up to the
levels of 200-DMA and remains in range bound consolidation as well. The levels
between 200-DMA and the 100-DMA would be crucial as the Markets may remain
directionless and in range bound consolidation heading nowhere. Any breach of
either of the levels with little conviction and volumes is likely to dent the
Markets further.
All and all, we continue with our view that the Markets
would continue to see the corrective activities and the behaviour of the
Markets vis-à-vis the levels of 200-DMA would be crucial. Also, this being the
rollover week, the session would also remain dominated with rollover activities
and is equally likely to keep the Markets volatile. Fresh positions should be
taken very selectively. However shorts should be avoided as the Markets remain
without any directional concensus.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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