Wednesday, June 12, 2013
MARKET REPORT June 12, 2013
The Markets saw sharp weakness coming in the moment it breached its 100 and 50 DMA as it opened lower on back of global weakness and ended the day with a sharp cut, testing its 200-DMA. The Markets opened on a negative note following global and technical weakness and in the morning trade itself saw one way drifting as it went on test its 200-DMA while it gave its day’s low of 5780.35. However, the second half of the session saw feeble attempt of the Markets to recover from its day’s lows as it slowly attempted to inch upwards partially recovering some of its losses. However, this did not sustain as the last half hour of the trade saw weakness returning and sent the Markets trading near its lows again. No recovery was seen towards the end and the Markets finally ended the day at 5788.80, posting a sharp cut of 89.20 points or 1.52% while it formed a sharply lower top and lower bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Technically speaking, since the Markets have ended near the low point of the day, they are expected to open on a modestly negative note at least in the initial trade and look for directions. Today, the Markets are expected to open on a modestly negative note and intraday trajectory would be critically important today. The Markets have closed marginally below its 200-DMA and it would be critically important for the Markets to recover and trade above its 200-DMA in order to avoid further weakness.
The levels of 5794, which is the 200DMA and the levels of 5865 shall act as immediate resistance. Supports come in at 5765 and 5740 levels.
The RSI—Relative Strength Index on the Daily Chart is 34.6470 and it has reached its lowest value in last 14-days which is bearish. It does not show any bearish or bullish divergence. The Daily MACD is bearish as it trades below its signal line.
On the derivative front, the NIFTY June Futures have added over 13.98 lakh shares or over 11.49% in Open Interest. The same has been the case with BANKNIFTY futures as well. This has been for the first time since last so many sessions that addition in open interest is reported. This signifies that huge amount of shorts have been created and this can lend support at lower levels preventing the Markets from breaking down much.
Overall, the Markets have closed marginally below its 200-DMA. Given this, it would be very necessary and critically important for the Markets to recover and trade above 5794 which is the 200-DMA in case of any weak opening. The positive factor is the very high amount of Open Interest that NIFTY has reported to have been added. This can lend support at lower levels.
All and all, given the reading that very high amount of open interest has been added in NIFTY as well as major stocks, it is advised to strictly refrain from taking any short positions even if the Markets have closed marginally lower than its 200-DMA and even if it opens modestly lower and drifts in the initial trade. There are significant amount of chances that the Markets limits its losses and find supports. Any downside should be utilized to make selective purchases. Overall mildly optimistic outlook is advised for today.
Consulting Technical Analyst,
Tuesday, June 11, 2013
MARKET REPORT June 11, 2013
The Markets had a terrible session yesterday as it remained highly volatile while failing to capitalize on positive opening. The Markets opened on a positive and stronger note aided by strong global markets. However, after opening on a stronger and positive note, the Markets gave its intraday high of 5931.65 in the very early minutes of the trade. Immediately after a stronger opening, the Markets transformed itself into falling channel and trajectory and kept losing ground gradually. It came off it day’s high and traded flat by late afternoon trade. The Markets moved with capped gains in the most post of the session in sideways trajectory. However the Market saw some pressure building up again in the last hour and half of the trade. It came off again and dipped into the negative territory to give the day’s low of 5857.40. The Markets came off again from those lows and finally ended the day flat with minor loss of 3 points or 0.05% while forming a lower top and lower bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
The Markets have headed nowhere yesterday despite stronger opening. Today, on the other side, expect the Markets to open moderately on the lower note and look for directions. Today, the Markets are most likely to open below its 100 and 50-DMA levels and these levels shall act as resistance for the rest of the session. It would be crucial to see if after opening lower, the Markets shows any resilience or continues to drift lower.
For today, since the Markets are expected to open lower, the levels of 5892 shall act as resistance for the rest of the session. The supports come in at 5810 levels.
The RSI—Relative Strength Index on the Daily Chart is 40.5902 and it has reached its lowest value in last 14-days which is bearish. However, it does not show any bullish or bearish divergence. The Daily MACD continues to trade below its signal line and remains bearish.
On the derivative front, NIFTY Jun futures have shed 1.57 lakh shares or 1.27% in Open Interest. This signifies that minor offloading has continued. No shorts have been created or fresh longs have been initiated so far.
Having said this, it is important to note two things. One, the Markets has ended a notch below its 100 and 50-DMA and this is certainly bearish. With the Markets slated to open lower today, these levels shall continue to pose resistance for today as well as for the next days to come. It would be very important for the Markets to move up and trade above 5895-5900 levels in order to avoid any weakness. Two – there is one positive sign as well which can help the Markets to behave in resilient manner. The two DMAs, i.e. the 100 and 50-DMA are attempting a positive crossover. There are chances that the 50-DMA cuts the 100 from above, which is a positive and bullish formation and likely to lend support and resilience to the current Market conditions.
All and all, as of today, the Markets lacks any positive triggers on the upside and the immediate reading is the with the lower opening slated, the levels of 5895-5900 shall continue to pose resistance in the immediate short term. However, with minor chances of recovery from lower levels still remaining, we continue to advice to keep protecting profits vigilantly until the Markets gets clear directional bias. Until this happens, positions too should be maintained in highly selective manner. Overall, cautious approach with mild optimism is advised for today.
Consulting Technical Analyst,
Monday, June 10, 2013
MARKET REPORT June 10, 2013
What seemed to be a decent recovery after testing the levels of 100 and 50 DMA, the Markets fizzled out in the second half of the session to end the day with losses again. The Markets opened on a negative note but soon recovery from its opening lows to trade in the positive territory in the morning trade. In the late morning trade, the Markets even perked up further as it went on to give the day’s high of 5972.70. However, hopes turned sour as the Markets did not sustain this recovery. It became weak in the second half of the session. The second half of the session saw some selling pressure coming in which intensified further towards the end. The Markets came off from its highs and traded in capped range near its previous close. It went negative in the last hour of the trade and went on to give the day’s low of 5871.30, coming off nearly 101-odd points from its day’s high. It finally ended the day at 5881, posting a net loss of 40.40 points or 0.68% while forming a higher top and similar bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Technically speaking, the Markets have come off its intraday highs on Friday and ended at the day’s lows. Going by this, they would, under normal conditions, open lower and continue with the downtrend. However, the global Markets are trading higher and this is likely to cause a positive and little stronger opening in our Markets. However, the key would be to see the intraday trajectory the Markets forms after opening. It would be critical for the Markets to sustain opening strength in order to capitalize on the positive opening.
The Markets have made a temporary top of 5972. For today, the levels of 5925 and 5960 shall act as resistance and the levels of 5855 and 5810 are likely to act as resistance. However, if the Markets sustains its positive opening, the levels of 100 and 50-DMA, i.e. 5887 and 5894 shall continue to act as support at the Close levels.
The RSI—Relative Strength Index on the Daily Chart is 40.8089 and it has reached its lowest value in last 14-days which is bearish. However it does not show any bearish or bullish divergence. The Daily MACD is bearish as it continues to trade below its signal line. On the Weekly Charts, RSI is 51.6238 and it is neutral as it shows no bullish or bearish divergences or failure swings. The Weekly MACD remains bullish as it trades above the signal line but is moving towards negative crossover.
On the derivative front, NIFTY has shed a nominal 1.22 lakh shares or 0.98% in Open Interest. The interpretation of this data would be that no shorts were created while the NIFTY came off over 100-odd points. This certainly remains a negative as the NIFTY has been shedding OI in previous sessions on its way down indicating unwinding / offloading and before any sustainable up move, it will have to add to fresh longs.
Having said this, it is important to note that there are no triggers, going through technical indicators and F&O data as well indicating the Markets have an upside. Under these circumstances, there are chances that the Markets see positive and strong opening but is equally likely to fizzle out in the later part of the session. Key would be to capitalize on the opening gains and sustain them and therefore intraday trajectory would be important.
All and all, the Markets, as we mentioned in the previous edition of Daily Market Trend Guide, is still not completely out of the woods. While there has been no breaching of the DMAs significantly, shorts must be avoided. In the same breadth, since the Markets have made an temporary top at 5972 levels, any upside should be utilized to book and protect profits while making purchases on a very selective note.
Consulting Technical Analyst,