MARKET TREND FOR TODAY
May 31, 2013
On the expiry day yesterday the Markets had a range bound
session for the entire day which got little volatile towards the end as the
Markets ended the day and the current derivative month with modest gains. The
Markets opened on a negative note on weak technical and weak global cues and
until the first half of the session in the late afternoon trade, it continue to
trade in the negative. However, it did make a low of 6072.15 in the morning
trade. The Markets traded in an extremely capped and narrow range for the most
part of the session. However, the last hour of the trade which obviously
remained dominated with high rollover centric activities saw some volatility
creeping in the Markets. The Markets saw a sharp spurt in the last thirty
minutes of the trade and went on to give the day’s high of 6133.75. However, it
came off a bit from its day’s high and ended the day at 6124.05 posting a modest gain of 19.75 points
or 0.32% while continuing to form a parallel bar, i.e. a similar top and bottom
on the Daily High Low Charts.
With the Markets consolidating
yesterday , today also, like the previous two sessions, the analysis would
remain more or less same as the Markets are expected to open on a flat note and
look for directions. With the Markets likely to open flat, it is likely to
trade around its critical levels of 6100-6110 and the behaviour of the Markets vis-à-vis
these levels would be crucially important. Also, the Markets are likely to react to the Q4 GDP
numbers coming in later today and they are not likely to be encouraging.
For today, the levels of 6135 and 6160 are immediate
resistance for the Markets. The supports continue to come in much lower at 6080 and 6020 levels.
The lead indicators continue to indicate neutral to mildly
bearish bias. The RSI—Relative Strength Index on the Daily Chart is 59.1451 and
it does not show any bullish or bearish divergence and also does not show any
failure swings and therefore it is neutral. The Daily MACD, however, continues
to remain bearish as it trades below its signal line.
On the derivative front, the NIFTY reported 57% of rollovers
as against 66% in the previous months. Though the NIFTY-wide rollovers have
been lower, the rollovers in Stocks and BankNifty have been reported more or
less unchanged.
Overall, the Markets are still devoid of any explicit
triggers on the upside. If we read other indicators, then the prices of gold
have moved up a bit in previous few days. Further and more importantly, the INR
has continued to weaken in spite of some strength in the Markets that we saw in
last few sessions. This behaviour of INR to USD is not in sync with the
movements in the markets.
All and all, we continue to reiterate the caution in the
Markets. As mentioned earlier, the Markets are devoid of any explicit triggers
on the upside. Also, it may react, violently on either side to the Q4 GDP
numbers which shall come in later today and they are no expected to be
encouraging. Given this indecisive technicals which have a mild downward bias
and some external news flow pending, it is advised to avoid taking aggressive positions
on either side until the directional bias gets confirmed. Overall, reserved and
selective approach is advised for the Markets today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
