MARKET REPORT November
07, 2013
After spending the morning session in a capped range, the
Markets continued with their corrective activity as it ended its day with
losses. The Markets opened on a flat note and while giving day’s high of
6269.70 in the morning trade, it spent the morning session in a very capped and
range bound trade. It was in the afternoon trade that some more weakness crept
in the Markets and it slipped into the red. While not sustaining a very feeble
attempt to recover in the late morning trade, the Markets slipped further to
give the day’s low of 6208.70 while slipping below the support zone of 6230
levels. It finally ended the day at 6215.15, posting a net loss of 38 points or
0.61% while forming a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a flat to modestly
negative note and look for directions. Since the Markets have ended the day
below 6230 levels, there are bright chances that we may the Markets continuing
to remain in the corrective mode for some time while the levels of 6230-6250
acting as resistance again.
The levels of 6230 and 6250 would act as immediate
resistance for the Markets. The support exist at 6175 and 6150 levels.
The RSI—Relative Strength Index on the Daily Chart is
58.7872 and it is neutral as it shows no failure swings or any kind of bullish
or bearish divergence. The Daily MACD
has again turned bearish as it has reported a negative crossover.
On the derivative front, the NIFTY November futures have
shed yet another over 8.87 lakh shares or 3.95% in Open Interest. This shows
that the profit taking and unwinding of positions had continued yesterday as
well.
Going by the pattern analysis, the Markets have slipped
below the 6230 levels and on its way up, the levels of 6230-6250 would again
pose resistance. Until this happens, we would continue to see the Markets in
the corrective mode and some chances of weakening further. The lead indicators
too support this reading and so do the F&O data. Unless we see some
addition in open interest with the Markets sustaining the current levels, such
corrective mood would prevail in the Markets.
All and all, given this analysis, it is advised to refrain
from taking over exposure and taking aggressive positions in the Markets on
either side. It is further advised that while refraining from over exposure,
liquidity should be maintained while making very cautious and selective
purchases. Neutral to mildly negative outlook is advised for the Markets today
unless it moves past the levels of 6230.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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