MARKET REPORT September 18, 2013
Markets had a
thoroughly capped session as it heavily consolidated yesterday given range and
finally ended the day with minor gains. The Markets opened on a negative note
and soon dipped to the day’s low of 5804.90 in the early morning trade. The
Markets, though recovered those early losses in the morning session itself as
it traded near its previous close. The Markets spent almost entire session in a
very narrow 20-odd point range as it continued to hover around its 200-DMA
levels. In the last hour of the trade, it did see a feeble attempt to move up
which took it into the green and also to its day’s high of 5857.80. It came off
a bit from those levels but finally ended the day at 5850.20, posting a very
minor gain of 9.65 points or 0.17% while forming a sharply lower top but
similar bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
It is important to note that the Markets have managed to
keep its head above the levels of 200-DMA which is 5840.12 today. Today, it is
likely to open on a flat to mildly positive note and look for directions. The
analysis for today remains more or less similar on yesterday’s lines as it
would be very crucial for the Markets to keep its head above 200-DMA and
therefore, its behaviour vis-à-vis this levels would be very crucial.
For today, the levels of 5875 and 5905 would act as
immediate resistance levels for the Markets. The supports exist at 5820 and
5760 levels.
The RSI—Relative Strength Index on the Daily Chart is
59.8051 and it does not show any bullish or bearish divergence or failure
swings. The Daily MACD remain bullish as it trades above its signal line.
On the derivative front, the NIFTY September futures have
went on to shed another 8.44 lakh shares or 5.02% in Open Interest. There has
been a steady decline in Open Interest levels since last three session and this
clearly indicates that the Markets are set to see one correction coming in.
The indications on the Charts remain very clear. The
Markets, with great difficulty have managed to keep its head above the levels
of 200-DMA and therefore, even today, the behaviour of the Markets vis-à-vis these
levels would remain crucially important. It is also important to note that any
dip below the levels of 200-DMA would bring in further weakness in the Markets.
Now, if we read the F&O data along with this reading, the steady decline of
Open Interest clearly increases the possibility of a imminent correction.
All and all, with this reading, it is advised to refrain
from taking aggressive long positions. The outlook remains similar to that of
yesterday and it is advised to keep protecting profits wherever possible. Since
selective out performance shall always remain, new positions should be taken,
but very selectively. Overall, with the possibility of the Markets moving below
the levels of 200-DMA, we advice to continue to maintain cautious outlook on the
Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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