MARKET REPORT October
25, 2013
The session had a buoyant start yesterday and it made a
strong attempt to clear the key resistance levels of 6250 but the Markets saw
these levels continue to act as resistance as the Markets came off from those
levels and ended the day with losses. The Markets opened on a positive note and
soon went on to give the day’s high of 6252.45 in the morning trade. However,
for the fourth time, the key resistance zone of 6230-6250 stood fiercely as
resistance. The Markets took a negative turn and kept paring gains to the
extent of turning negative. It came off nearly 90-odd points to give day’s low
of 6142.95. It saw some minor recovery in the end but still ended the day in
negative as it closed at 6164.35, posting a net loss of 14 points or 0.23%
while forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets came off nearly 90-odd
points from day’s high yesterday as the zone of 6230-6250 held out fiercely as
resistance. Today as well, expect the
Markets to open on a negative note and continue with correction, at least in
the initial session. The intraday trajectory would be important to determine
the trend for today but overall, the Markets are expected to trade with
corrective bias.
The levels of 6230 and 6250 would
continue to act as immediate and important resistance for the Markets. The
supports come in lower at 6110 and 6075 levels.
The RSI—Relative Strength Index on the Daily Chart is
63.9296 and it has reached its lowest value in last 14-days which is bearish.
The Daily MACD continue to trade bullish, above its signal line. On the
Candles, the Chart shows possibility of a formation of a top which might
indicate a reversal. A doji star occurred (where a doji gaps above or
below the previous candle). This often
signals a reversal with confirmation occurring on the next bar. Also, A long
upper shadow occurred. This is
typically a bearish signal (particularly when it occurs near a high price
level, at resistance level, or when the security is overbought).
On the derivative front, NIFTY October futures have further shed
over 3.47 lakh shares or 1.98% in Open
Interest. This showed that unwinding of long positions continued and some
reduction in longs is seen.
Given the above reading, going by both pattern analysis and the
F&O data, it is absolutely evident that the resistance zone of 6230-6250
has held out very strongly to the extent that it has become a immediate top for
the Markets. No up move shall occur until the markets move past these levels
and until this happens, as mentioned in our yesterday’s edition, the Markets
would trade in a broad trading range with some volatility ingrained in it with
a negative bias.
All and all, in such circumstances, it is advisable to refrain
from creating aggressive positions on either side. However, since the Markets
are in corrective mode, any downside should be utilized to make selective
purchases. Overall, approaching Markets with cautious optimism is continued to
be advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.