MARKET REPORT October
31, 2013
The Markets spent the whole session yesterday flirting with
the upper band of key resistance zone of 6230-6250 levels as it resisted these
levels numerous times before ended the day with modest gains. The Markets
opened on a positive note and spent the first half of the session in a narrow 20-odd point range resisting near
the 6230 levels. The Markets attempted to move past that levels and flirted
with the upper resistance levels of 6250 more than once while it gave the day’s
high of 6269.20. The Markets failed to breach those level comprehensively and
came of more than twice from those levels. It finally ended the day at 6251.70
with a modest gain of 30.80 points or 0.50% while forming a higher top and
higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today’s session would be very critical for the Markets as
today is the expiry day of the current derivative series. The Markets have
closed precisely at the resistance levels of 6250 and it is expected to open on
a flat to mildly negative note. If it opens modestly negative, its behaviour vis-à-vis
the levels of 6250 would be extremely important and critical.
For today, the levels of 6270 and 6295 would act as
immediate resistance levels and the supports would come in at 6205 and 6165
levels.
The lead indicators continue to show weariness on the Daily
Charts. The RSI—Relative Strength Index on the Daily Chart is 66.3873 and it
does not show any failure swings. But the NIFTY has set a new 14-day high but
RSI has not and therefore, the Bearish Divergence continues to Daily Charts.
The Daily MACD has reported a positive crossover and it now trades above its
signal line.
On the derivative front, total NIFY Open Interest has
continued to show nominal reduction. This signifies no major unwinding of long
positions is seen and at the same time, no major longs has been added as well.
Rollovers have remained average in line with the previous month.
The reading of pattern analysis on the Daily Charts very
clearly suggest the Markets consolidating in the resistance zone of 6230-6250
levels. If we make a plain reading, it has so far not been able to breach those
levels comprehensively until now. Further if we read the lead indicators along
with this, it shows some tiredness in the indicators and this suggests that there
is more time before the Markets breaches these levels on the upside.
All and all, there is no breach of the resistance zone of
6230-6250 on the upside with conviction. Until this happens, high degree of
caution is advised in the Markets. Though any downside may be utilized for
making fresh purchases, this should be done on extremely careful and selective
basis while protecting profits at higher levels. Some amount of volatility
would continue to stay. Cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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