Tuesday, November 19, 2013

Daily Market Trend Guide -- Tuesday, November 19, 2013

MARKET REPORT                                                                                         November 19, 2013
The Markets had a session of yet another sharp up move as it continued with its up ward journey and ended the day with robust gains. The Markets opened positive, even stronger than the expected note and maintained its gains throughout the session. After trading sideways with decent gains in the first half of the session, it got even stronger. In the second half, it got even stronger as it went on to give the day’s high of 6196.80. It hovered around those levels and maintained gains on the higher side and finally managed to end the day at 6189, posting a very robust gain of 132.85 points or 2.19% while continuing to form a higher top and higher bottom on the Daily High Low Charts.


MARKET REPORT

The Markets have risen over 230-odd points in last two sessions and today, we can see a flat opening and see the Markets consolidating a bit. If the Markets consolidate, and even if it mildly corrects, it would be healthy for the Markets in the immediate short term. The Markets would open flat to mildly negative and look for directions while intraday trajectory playing a important role to decide the trend for today.

For today, the levels of 6225 and 6240 would act as immediate resistance for the Markets. The levels of 6150 and 6110 are immediate supports for the Markets.
The RSI—Relative Strength Index on the Daily Charts is 56.1796 and it is neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD still continues to trade below its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.  There have been 7 rising windows in the last 50 candles--this makes the current rising window even more bullish.
On the derivative front, NIFTY November futures have shed over 3.94 lakh shares or 2.20% in Open Interest. This signifies that the short covering in the Markets have continued. Additions of fresh longs would be required to take the rally ahead.
Given the above reading, with the Markets rising over 230-odd points in previous two session and with the total open interest being reduced, some correction in the Markets, or at least consolidation is imminent and also required. There are fair chances that we see the Markets consolidating in the near term. Addition of fresh longs and increase in OI would be required to set the base for a further up move.
All and all, the Markets are likely to see a mild correction or at least consolidation in the near term especially after one way 230-odd points rise. We would see the Markets consolidating but the undercurrent would continue to remain buoyant and bullish and the defensives are likely to out perform. Any downside should be used to make selective purchases. Overall, positive outlook is continued on the Markets.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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