MARKET REPORT
October 07, 2013
The Markets moved on either side in a broad range on Friday
or expected consolidated as it ended the day on a absolutely flat note. The
Markets opened on a decently positive note and traded strong in the initial
trade but the late morning trade saw sudden paring of gains by the Markets. The
Markets came off by over 50-odd points in the late morning trade and even went
on to give the day’s low of 5885. From here, the Markets saw a gradual recovery
from the day’s low. It slowly crawled back into the green and even went on to
give the day’s high of 5950.45 in the late morning trade. This did not sustain
either. The Markets failed to sustain at these levels and again saw paring of
gains from the high point of the day. The Markets pared all of its recovered
gains, dipped in to the red for a while and finally ended the day at 5907.30, posting
a absolutely flat close with nominal loss of 2.40 points or 0.04% while forming
a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today as well, we can
expect some consolidation in the Markets to continue. The Markets are likely to
open on a modestly negative note and look for directions. With the 200-DMA a
acting as support, the Markets are likely to continue to remain in a broad
trading range. Intraday trajectory would continue to remain important.
For today, the levels of 5950 and 5980 would continue to act
as immediate resistance levels for the Markets. The supports would come in at
5840 in form of 200-DMA and further at 5804 in form of 100-DMA today.
The RSI—Relative Strength Index on the Daily Chart is
56.4249 and it continues to remain neutral as it shows no bullish or bearish
divergence or any kind of failure swings. The Daily MACD is bearish as it continues to trade below its signal line.
On the derivative front, the NIFTY October futures have
added 98,500 shares or nearly 0.57% in Open Interest. The addition in the Open
Interest remains little or insignificant but it shows that no paring of OI is
seen and no significant unwinding of positions is seen.
Given the above reading, it is clear from the pattern
analysis that the Markets are in a consolidation phase with the two DMAs (200
and 100) acting as support. The Markets would continue to consolidate with
positive bias until they maintain levels above these two DMAs. It is likely
today that we see the opening on a negative side but the Markets again
consolidates from those levels and recover during the day.
Given the Markets remaining in a broad trading range and
with a likelihood that it would consolidate, there are chances that we may see
a range bound session with some amount of volatility ingrained in it. However,
we advise to strictly avoid any shorts as there is no structural breach on the
charts. Any down side or any such consolidation phase should be used to make
selective purchases while vigilantly protecting profits. Positive caution is
advised as selective out performance would be seen.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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