MARKET REPORT October
10,2013
The Markets had a robust session after a weak opening
yesterday wherein it opened negative, formed the day’s low in and then
recovered over 110-odd points to end the day near the high point of the day.
The rally was fuelled by a positive trade data which saw the trade deficit
narrowing and touching a 30-month low. The Markets opened weak and formed its
day’s low of 5877.10 in the morning trade. However, soon after this, the
Markets transformed itself into rising trajectory and for the rest of the
session kept gradually making new highs. It came back into the green and went
on to give the day’s high of 6015.50. It maintained those levels and finally
ended the day at 6007.45, posting a net gain of 79.05 points or 1.33% while
forming a higher top but lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to take a breather and open on a
negative note. The Markets are expected to open on a lower note again and look
for directions. The consolidation would be seen again today and the intraday
trajectory would continue to remain important. The further up move would be
seen only if the Markets move past the levels of 6035.
The levels of 6035 and 6070 are
immediate resistance levels on the charts. The supports exist at 5920 levels
and further down at 5840 levels. This keeps the Markets in a broad trading
range.
The RSI—Relative Strength Index on the Daily Chart is
61.3629 and it is neutral as it shows no bullish or bearish divergence or any
kind of failure swings. The Daily MACD, as we had reported yesterday has today
given a positive crossover and it is now bullish as it trades above its signal
line. However, on the Candles, An Engulfing Bullish Line has occurred. If the engulfing
bullish pattern occurs during an uptrend (which appears to be the case with
NIFTY), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the
next candle closes below the top of the current (white) candle's real body.
On the derivative front, the NIFTY October futures have added over
7.82 lakh shares or 5.05% in Open Interest. This is a positive indication as
this shows that fresh longs were added after two days of short covering and
shedding of Open Interest.
Taking into account the pattern analysis, lead indicators and the
F&O data, it can be fairly be concluded that the Markets have finally
attempted to form a bottom at its 200-DMA, at least as of now and we can expect
a certain upward bias. However, looking at a candle formation, there are mild
chances that the Markets consolidates again for a while. However, this would be
a range bound consolidation, if at all it happens as the Markets still continue
to remain in a broad trading range.
All and all, though we may see a mildly negative opening, we will
see the Markets consolidation in the initial trade and remain in a broad
trading range. Though it has not achieved a confirmed break out as yet, the
bias certainly remains positive. However, the Markets still continues to remain
in a broad trading range. Any position that is taken should be taken very
selectively and profits should still be vigilantly protected. Positive outlook
with mild caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.