Friday, May 10, 2013
MARKET TREND FOR TODAY May 10, 2013
While the volatility continued to stay, yesterday’s session saw the Markets consolidating, much on expected lines as it moved either way to finally end the day with moderate losses. The Markets opened on a modestly positive note and after trading positive in the opening minutes of the trade, it slipped into the negative. The Markets traded sideways in the negative territory in the morning trade in a extremely narrow and capped range before it moved back into the green while giving the day’s high of 6084.70. However, the last hour and half of trade saw volatility returning again as the Markets suddenly pared its gains and it not only went back into the negative but gave its day’s low of 6040.45. After hovering a bit around those levels, it finally ended the day at 6050.15, posting a moderate loss of 19.15 points or 0.32% while forming a similar top and higher bottom on the Daily High Low Charts.
Today also, the analysis would continue to remain on similar lines as the Markets are likely to continue to consolidate. Expect the Markets to open on a flat note and look for directions. Intraday trajectory would continue to be crucial as the Markets are likely to continue to consolidate today with chances of profit taking from higher levels as the Markets have resisted to pattern resistance as mentioned in our yesterday’s edition.
For today, the levels of 6085 and 6110 would act as important resistance and the supports come in at 6010 and 5975 levels.
The lead indicators remain neutral to mildly bearish. The RSI—Relative Strength Index on the Daily Chart is 67.3217 and it is neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to trade above its signal line. On the Candles, An engulfing bearish line occurred (where a black candle's real body completely contains the previous white candle's real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with NIFTY). It then signifies that the momentum may be shifting from the bulls to the bears.
On the derivative front, NIFTY May futures have added 3.87 lakh shares or 1.83% in Open Interest. This shows no significant offloading has been done yesterday even if the Markets pared its gains in the last hour and half of trade.
We continue to reiterate our advice on similar lines like that of yesterday. The Markets ARE showing potential signs of some continuing consolidation or possibilities of minor profit taking. Even in case of any up move, it would move towards getting overbought again. Further, it has resisted to its pattern resistance – Double Top—at 6085 levels and these levels would continue to act as resistance for today as well.
All and all, with the Markets continuing to resist at the mentioned levels, we continue to reiterate that no aggressive fresh long positions should be built and any available up move should be utilized to protect profits in existing positions. Any fresh positions should be created very selectively and over leverage should be avoided. Overall, continuation of cautious approach is advised for today as well.
Consulting Technical Analyst,
Thursday, May 9, 2013
MARKET TREND FOR TODAY May 09, 2013
Yesterday’s session remained with much expected volatility as the Markets moved in either direction before continuing to end yet another day with minor gains. The Markets opened on a moderately positive note and after briefly trading into positive in the morning session, slipped into the red to give the day’s low of 6024.95. The second half of the day saw the Markets again recovering from its lower levels. The Markets inched back into the green from its day’s lows and traded in the positive again. In the last hour of the trade, the Markets saw some more strength as it went on to give the day’s high of 6083.55. It came off a bit from there to finally end the day at 6069.30, posting a modest gain of 25.75 points or 0.43%, while continuing to form a higher top and higher bottom on the Daily High Low Charts.
Today’s session would be important for the Markets again and the analysis would remain more or less similar as that of yesterday. The Markets are expected to open on a flat to moderately positive note and look for directions as they face stiff resistance from a major pattern formation and would also get overbought as it inches upwards today. The volatility is expected to stay and intraday trajectory would be crucial.
For today, the levels of 6095-6105 shall act as a stiff resistance in form of a pattern resistance. There is a Double Top formation near this levels and this should act as a major resistance. The supports come in much lower at 6010 and 5975 levels.
The lead indicators stands almost overbought. The RSI—Relative Strength Index on the Daily Chart is 69.4642 and it does not show any bullish or bearish divergence but it has reached its highest value in last 14-days. The Daily MACD continues to remain bullish as it trades above its signal line.
On the derivative front, NIFTY May futures has added over 3.98 lakh shares or nominal 1.98% in the Open Interest.
Having said this, the Markets are showing all signs of a imminent correction which now is much required which will enable the Markets to consolidate on its recent recovery for further sustainable up move. Also, with the Markets trading near its important pattern resistance and also with the lead indicators almost overbought, any further up move shall would make itself much unhealthy and not sustainable without a consolidation or a correction.
All and all, given this reading, we continue to sound caution in taking any fresh long positions in the Markets. The Markets, though while seeing liquidity driven rally, tends to neglect technicals, but it certainly makes any purchases made at such higher levels susceptible to any correction. It is thus advised to strictly refrain from making aggressive purchases and utilize an further up moves in protecting profits on existing positions. Cautious approach is continued to be advised.
Consulting Technical Analyst,
Wednesday, May 8, 2013
MARKET TREND FOR TODAY May 08, 2013
The Markets saw a buoyant session yesterday driven by liquidity as it opened positive and later surged further on the upside to end the day with gains. The Markets opened on a positive note following positive global trend. It traded positive, but in a capped range in a sideways trajectory in the first half of the session. However, in the second half in the afternoon, it saw further strength as it perked up further. The Markets went on to give the day’s high of 6050.50 towards the end of the session. It ended the day at near the high levels of the day at 6043.55 posting a decent gain of 72.50 points or 1.21% while forming a sharply higher top and higher bottom on the Daily High Low charts.
Technically speaking, since the Markets have ended the day near the high point yesterday, it is likely that it opens on a positive note again and continues with its up move, at least in the initial trade. We are likely to see a positive opening but the intraday trajectory would continue to be important as sustainability of the opening gains would be crucial given the indications on the lead indicators.
For today, the levels of 6060 an 6085 are likely to act as resistance on the Charts and the supports come in much lower at 5990 and 5955 levels.
The lead indicators show some signs of weariness in the Markets. The RSI—Relative Strength Index on the Daily Charts is 68.2001 and it does now show any failure swings. However, the NIFTY has set a new 14-day high but the RSI has not. This is a BEARISH DIVERGENCE. The Daily MACD continues to remain bullish as it trades above its signal line.
On the derivative front, the NIFTY May futures have added over 16.80 lakh shares or 8.78% in Open Interest. This is certainly a positive factor for the Markets as it shows continuation of creation of longs and the rise that we saw yesterday was not on account of short covering. The NIFTY PCR stands at 1.20 as against 1.14 yesterday.
Having said this, it is important to note that any further continuation of up move shall take the Markets near its OVERSOLD levels. It is also important to note that, the lead indicators have started showing the signs of weariness in the Markets. Though it may not get reflected immediately, it shows some indication of impending minor correction. It is also important to note that many of the key components of the NIFTY are already trading OVERSOLD with their lead indicator overstretched.
Keeping this in view, it sometimes happens that the Markets continue to see up move even if the lead indicators on the technical charts suggest otherwise. It may continue to see buoyancy for some more time as the rally is liquidity driven, which often tends to disregard caution indicated by the Charts. Even today, there are chances that we may continue to see the up move, but given the overall reading, we would strongly suggest to use any further up move as an opportunity to book profits and fresh long positions should be avoided at this juncture. Overall, continuation of approach with high degree of caution is advised for today.
Consulting Technical Analyst,
Tuesday, May 7, 2013
MARKET TREND FOR TODAYB May 07, 2013
The Markets remained volatile within a range bound trade yesterday as it moved in either directions and ended the day with modestly positive gains. The Markets opened on a moderately positive note and soon dipped into the red in the early minutes of the trade to give the day’s low of 5928.45. Thereafter, it went on to come into the positive territory and moved up almost 40-odd points from its days low. However the afternoon session saw paring of all of its morning recovery as it came off from its morning highs to trade modestly into the negative. The second half of the session, especially last two hours of the trade saw some recovery again as the Markets gave its day’s high of 5976.50 and ended the day at 5971.05, posting a modest gain of 27.05 or 0.46% while forming a mildly lower top and lower bottom on the Daily High Low Charts.
Today’s session would see a modestly positive to flat opening today. Technically speaking, since the Markets have ended the day near the high point of the day, it is likely to continue with its up move today, at least in the initial session. However, the key would be to see if the Market is able to capitalize from its modestly positive opening that it is likely to see. Since the opening levels would be around its pattern resistance, intraday trajectory would be crucial to determine the trend.
For today, the levels of 5990 and 6020 would act as resistance levels for today and the supports come in at 5935 and 5910 levels.
The lead indicators are neutral. The RSI—Relative Strength Index on the Daily Chart is 64.3446 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD is bullish as it trades above its signal line.
On the derivative front, NIFTY May futures have added over 6.36 lakh shares or 3.44% in Open Interest and this is a mildly bullish indicator as the last hours improvement in the Markets can be attributed to some fresh longs and it was not because of any short covering.
Having said this, it is important to note that the Markets face a stiff pattern resistance near the levels of 6000-6020 any as mentioned in our previous edition, any sustainable fresh up move can occur only after the Markets moves past these levels. Until this happens, it is likely to remain in a broad trading range. At the same time, if the Markets tests these levels again, it would be either overbought or will see its lead indicators negatively diverging.
All and all, until the Markets moves past the levels of 6000-6020 we do not recommend any aggressive long positions in the Markets. Any positions, short or long, should be taken on extremely selective note and the profits on either side should be very vigilantly protected. Overall, with the Markets consolidating and with no directional triggers, some amount of volatility and possibility of minor correction from higher levels cannot be ruled out. Cautious outlook is advised for today.
Consulting Technical Analyst,