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MARKET TREND FOR TODAY
The Markets yesterday traded precisely on expected lines as they opened weak, took support near its 200-DMA and ended flat once again and continued to positively consolidate.
Today, expect the Markets to open on a stronger note and look for directions. Though technicals and other factors suggest continuation of consolidation phase, but RBI's measures to increase liquidity by cutting MSF rate by 0.5% would fuel the stronger opening in the Markets. The intraday trajectory would be crucial as the opening levels would be around the resistance levels and it would be important to see if the trajectory the Markets forms after opening.
For today, the levels of 5950 and 5985 would act as resistance levels. The level of 200-DMA, 5840 and 100-DMA, 5804 would continue to act as immediate support for the Markets.
The RSI--Relative Strength Index on the Daily Chart is 56.3521 and it is neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD still remains bearish as it trades below its signal line.
On the derivative front, the NIFTY October futures shed 14.03 lakh shares or 8.05% in Open Interest. This is a negative indicator as this clearly suggest that the up move that we saw from the lows near the 200-DMA level was squarely due to short covering in the Markets.
If we read only the lead indicators and the techncial charts along with F&O data, it clearly suggest that the Markets are not completely out of the woods. However, given the step taken by the RBI to increase liquidity as mentioned above is likely to set the initial trading tone as positive. However, it would be equally important to see if the Markets are able to sustain the opening gains and capitalize on it further.
All and all, one more point that the Markets would react to later on is the continuing deadlock in the US which may bring in fresh financial crisis. Given all these, even if the Markets opens on a positive note, it is very important to see that we see fresh positions being built up. Though shorts should be still avoided, fresh purchases should be made very selectively. Given all the factors, cautious outlook is continued to be advised for today as well.
Milan Vaishnav,
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MARKET TREND FOR TODAY
The Markets yesterday traded precisely on expected lines as they opened weak, took support near its 200-DMA and ended flat once again and continued to positively consolidate.
Today, expect the Markets to open on a stronger note and look for directions. Though technicals and other factors suggest continuation of consolidation phase, but RBI's measures to increase liquidity by cutting MSF rate by 0.5% would fuel the stronger opening in the Markets. The intraday trajectory would be crucial as the opening levels would be around the resistance levels and it would be important to see if the trajectory the Markets forms after opening.
For today, the levels of 5950 and 5985 would act as resistance levels. The level of 200-DMA, 5840 and 100-DMA, 5804 would continue to act as immediate support for the Markets.
The RSI--Relative Strength Index on the Daily Chart is 56.3521 and it is neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD still remains bearish as it trades below its signal line.
On the derivative front, the NIFTY October futures shed 14.03 lakh shares or 8.05% in Open Interest. This is a negative indicator as this clearly suggest that the up move that we saw from the lows near the 200-DMA level was squarely due to short covering in the Markets.
If we read only the lead indicators and the techncial charts along with F&O data, it clearly suggest that the Markets are not completely out of the woods. However, given the step taken by the RBI to increase liquidity as mentioned above is likely to set the initial trading tone as positive. However, it would be equally important to see if the Markets are able to sustain the opening gains and capitalize on it further.
All and all, one more point that the Markets would react to later on is the continuing deadlock in the US which may bring in fresh financial crisis. Given all these, even if the Markets opens on a positive note, it is very important to see that we see fresh positions being built up. Though shorts should be still avoided, fresh purchases should be made very selectively. Given all the factors, cautious outlook is continued to be advised for today as well.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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