MARKET REPORT December
19, 2013
The Markets go a pleasant surprise when the Reserve Bank of
India in its Credit Policy left repo rate unchanged at 7.75 percent and CRR at
4 percent of net demand and time liability (NDTL), saying it was willing to
wait for more inflation data before taking an action. The Markets which had
opened on a modestly positive note and was trading with capped range until the
RBI came up with its announcements gave a positive reaction to this. The Markets
opened and traded with capped gains in the morning trade saw a sharp spurt
following this announcement while it gave its day’s high of 6236. Post giving
this high, the Markets nicely maintained these gains as it spent rest of the
session in sideways trajectory. It finally ended the day at 6217.15, posting a
decent gain of 78.10 points or 1.27% while forming a sharply higher top and
slightly lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a modestly positive
note again and continue with its up move at least in the initial trade. The
overall triggers remain supportive and it is likely that the Markets would
sustain its positive opening and build up on it. The levels of 50-DMA has so
far nicely continued to act as support at Close levels.
For today, the levels of 6245 and 6280 are immediate
resistance on the Daily Charts. The supports exist at 6180 and 6155 levels.
The lead indicators continue to remain in place with no
negative breach on either side. The RSI—Relative Strength Index on the Daily
Chart is 53.0737 and it is neutral as it shows no bullish or bearish divergence
or any failure swings. The Daily MACD, however, continues to remain bearish as
it trades below its signal line.
On the derivative front, NIFTY December futures have added
over 1.76 lakh shares or 0.81% in Open Interest. This can be sees as no profit
taking or short covering was seen during yesterday’s rally and this is a
positive indication as well.
The basic structure, going by the pattern analysis on the
Daily Charts remains in place as the Markets continue to trade above all of the
three DMAs while 50-DMA holding out as support during the entire last week.
Even F&O data shows nothing negative as of now. Going by this, the
undercurrent remains intact and even if the Markets consolidates, it should be
a fairly range bound consolidation with the levels of 50-DMA continue to
holding out as support.
All and all, it is very much likely that we see a decently
positive opening and also that the Markets sustains them, at least in the opening
trade. Given this overall reading, it is recommended to continue to avoid
shorts and utilize any minor profit booking events to make selective purchases.
Overall continuation of positive outlook is advised as undercurrent remains
intact and buoyant.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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