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Thursday, March 7, 2013

Daily Market Trend Guide -- Thursday, March 07, 2013

MARKET TREND FOR TODAY March 07, 2013

The Markets continued with its up move yesterday and also resisted around its expected resistance levels but still ended the day with modest gains. The Markets opened on a positive note on back of favourable global cues and gave its intraday high of 5828.70 in the late morning trade. Thereafter, the markets continued to trade in a capped range for the rest of the session as it kept moving in a 20-odd points capped range. It finally ended the day at 5818.60, posting a modest gain of 34.35 points or 0.59% while continuing to form a higher top and higher bottom on the Daily High Low Charts.

Today, though undercurrent remains intact, we may see a modestly negative to flat opening in the markets as there are chances that the Markets may take some breather from the pullback that it has been witnessing. The Markets are expected to open and trade in a capped range in the initial trade and the levels of 5800 would be important to see if further weakness creeps in.

For today, the levels of 5845.72, which is the 100-DMA of the Markets is likely to act as resistance at Close and this would be the important level that the Markets should watch out for.

The lead indicators depict a mixed picture. The RSI—Relative Strength Index on the Daily Chart is 45.5081 and it is neutral as it shows no negative divergence or failure swings. The Daily MACD is still bearish as it 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 4 rising windows in the last 50 candles--this makes the current rising window even more bullish.

On the derivative front, NIFTY Futures have went on to add over 3.29 lakh shares or over 2.01% in Open Interest and the NIFTY PCR stands at 1 as against 0.94.

To make sense of the above reading, the Markets certainly have a bullish undertone and though some consolidation in a capped range cannot be ruled out, at the same time, major correction is not likely. The Markets may spent couple of days trading in a range again before it attempts to move ahead and past its 100-DMA in order to continue with its reversal attempt.

All and all, mildly negative to flat opening likely and the Markets may trade in a range. It shall have to maintain levels of 5790-5800 and above in order to just consolidate and avoid any corrective weakness. Shorts should be refrained from and any temporary consolidation or mild downside should be utilized to make fresh purchases. Overall, cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, March 6, 2013

Daily Market Trend Guide -- Wednesday, March 06, 2013

MARKET TREND FOR TODAY March 06, 2013

The Markets yesterday traded precisely on expected lines as it did gave a pullback as indicated by the lead indicators and at the same time, resisted to the prescribed levels and has begun an attempt to reverse the trend. The Markets opened positive on back of strong global cues and after trading with capped gains in the morning trade, it perked up further and kept making gradual intraday highs. The Markets remained in upward rising trajectory throughout the session. In the late afternoon trade, it went on to give the intraday high of 5790.10. It finally ended the d ay near the high point of the day at 5784.25, posting a decent gain of 85.75 points or 1.50% while forming a sharply higher top and bottom on the Daily High Low charts.

Today, technically speaking, the Markets are expected to open on a moderately positive note and continue with its up move at least in the initial trade. This would be supported by the positive global cues. With the Markets likely to open positive, intraday trajectory would be important as it would dictate the trend for today. The Markets are likely to resist at its key levels while attempting a trend reversal.

For today, the levels of 5820 is likely to act as important resistance. The other level that it is likely to resist would be 5844.61, at Close, which is the 100-DMA as of today. The Markets will have to move past both of this levels, intraday and at close, for a trend to reverse. Otherwise, it would merely remain a pullback with the continuing downtrend.

The lead indicators are neutral. The RSI—Relative Strength Index on the Daily Chart is 41.5803 and is neutral as it shows no failure swings or bullish or bearish divergences. The Daily MACD still continues to remain bearish as it trades below its signal line.

On the derivative side, the NIFTY futures have shed nominal open interest by 1.09 lakh shares or 0.66%. This signifies that there is no major short covering seen in yesterday’s rally, nor any significant longs were added.

Overall, the levels of 5810 and 5840 shall act key resistance levels in coming days. The Markets have attempted a trend reversal, but this would confirm only after the Markets moves past these levels after a brief interim consolidation.

Al l and all, the immediate trend remains positive. The Markets shall open and trade positive in the initial trade but is also likely to resist to the key levels mentioned. It is advised to refrain from shorts as undercurrent remains strong however, at the same time, keep protecting profits at higher levels. Overall, positive outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, March 5, 2013

Daily Market Trend Guide -- Tuesday, March 05, 2013

MARKET TREND FOR TODAY March 05, 2013

The Markets had a listlessly negative session yesterday as it opened weak on weak global cues, but spent the rest of the session trying to move off its opening lows but still ended the day with modest losses. The Markets opened on a negative note on back of weak global markets and gave its intraday low of 5663.30 in the early minutes of the trade. Thereafter, the Markets kept making listless and conviction less attempts to recover as it gradually tried coming off its lows. However, it could not recover all of its losses in the rest of the session. It finally ended the day at 5698.50, posting a modest loss of 21.20 points or 0.37% forming a lower top and lower bottom on the Daily High Low Charts.

The Markets are oversold. Today, we may see some modestly positive opening today and we can see the Markets trade positive in the initial session. However, having said this, it is very important to note that the Markets are not completely out of the woods. Being oversold, it may see some technical pullback, but it may test its important supports in coming sessions.

For today, the levels of 5745 and 5780 are immediate resistance on the Charts. Supports come in much lower around its 200-DMA 5554.76.

The lead indicators of the Markets remain oversold. The RSI—Relative Strength Index on the Daily Chart is 29.8613. It is neutral as it shows no negative divergences or failure swings but it now trades in its OVERSOLD territory .The Daily MACD continues to trade below its signal line and is therefore bearish.

On the Candles, A lower shadow has occurred. Typically this is a potentially bullish signal particularly when this occurs near a low price level and when the Markets are oversold.

On the derivative front, NIFTY Futures have added massive open interest of over 12.20 lakh shares or 7.97%.

Given the above reading, with the Markets being oversold, there are technical chances of a pullback that we can witness either today or in coming immediate sessions. However , this will still keep the Markets below its supports which it broke. In order for the Markets to actually reverse its trend, it will have to move past the levels of 5775-5800 and continue further up move after brief consolidation. Only such pattern shall set stage for a technically sustainable trend reversal.

All and all, until the Markets moves past the specified levels, there may be a technical pullback with the Markets being oversold currently but the sustainability of such pullback would be a question. However, with the current status being oversold, it is advised to refrain from shorts and fresh longs can be taken selectively but the profits on the long side too should be very vigilantly protected. Overall, a mildly positive outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331