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Thursday, July 4, 2013

Daily Market Trend Guide -- Thursday, July 04, 2013

MARKET REPORT July 04, 2013

The Markets took a larger than expected cut yesterday as it opened negative in line with global markets but weakened further during the day to end the day with a deep cut. The Markets opened on a negative note following weakness in global markets and after trading with capped losses, slipped further in the afternoon trade to give the day’s low of 5760.40. After making this low, the Markets headed nowhere as it kept trading in a 20-odd point range. This continued until the end of the session. The markets finally ended the day at 5770.90, posting a deep cut of 86.65 points or 1.48% while forming a sharply lower top and lower bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

The Markets opened sharply lower below its 200 and 100-DMA yesterday and therefore, these levels would act as immediate resistance for today. Expect the Markets to open on a modestly positive note and we are expected to see some respite from the weakness that we have been seeing from the past two sessions. The Markets are expected to open modestly positive and look for directions. Minor pullback cannot be ruled out.

For today, as mentioned above, the Markets will fact immediate resistance at 5828 and 5845 which is the 200 and 100-DMA of the Markets respectively. The Markets will have to move past these levels in order to continue to attempt reversal.

The lead indicators still do not show any kind of weakness on daily charts. The RSI—Relative Strength Index on the Daily Chart is 47.1810 and it does not show any failure swings or any bullish or bearish divergence and is therefore neutral. The Daily MACD is continues to remain bullish as it trades above its signal line.

On the derivative front, NIFTY July futures have reported a net decrease of 3.28 lakh shares or 2.24% in open interest. This is a little negative as it suggests some unwinding of positions. However, this needs to be replaced with fresh longs for the pullback to continue. The NIFTY PCR stands at 1.09 as against 1.11

Having said this, as mentioned above, all lead indicators continue to remain firmly in place and they do not depict any weakness in the immediate short term. With the derivative data showing decline in OI, this needs to be replaced with fresh longs. The likelihood is in this favour as lead indicators firmly remain in place, however the levels of 5825, and 5845 shall continue to act as immediate top for the Markets.

All and all, though some signs of weakness were seen in the F&O figures, no such weakness is seen on the Daily Charts. Further, since the Markets are moving in a narrow intraday band, we continue to advice to refrain from shorts as there has been no structural breach on the Charts. Any such downside should be utilized to make selective purchases as the defensives will continue to out perform. Overall, cautious but positive outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, July 3, 2013

Daily Market Trend Guide -- Wednesday, July 03, 2013

MARKET REPORT July 03, 2013

The Markets finally took a breather after three days of a very strong pullback as it opened modestly negative and spent the session in a capped range to weaken further to end with losses. The Markets opened on a modestly negative note, quite on expected lines and traded in a much capped range. For the most part of the session, the markets traded in a 20-odd points range and kept moving in either direction within this range. However, the last hour of the trade saw some more weakness creeping in as the Markets slipped further. Towards the end, it went on to give the day’s low of 5852.30. After hovering around this level, the Markets finally ended the day at 5857.55, posting a net loss of 41.30 points or 0.70% while forming a slightly lower top but higher bottom on the Daily High Low charts.

MARKET TREND FOR TODAY

For today, expect the Markets to open on a lower note and it is likely that it continues with its corrective activity but at the same time, resilience is expected from the Markets again. It is very much likely that the Markets may see itself opening around its 200-DMA levels and it might improve as we go ahead in the session. The opening levels and the intraday trajectory that it forms after opening would be critically important for the Markets.

The levels of 5890 and 5925 are immediate resistance levels for the Markets and supports come in at 5826 and 5790 levels.

The lead indicators do not show any weakness. The RSI—Relative Strength Index on the Daily Charts is 52.6671 and it is neutral as it shows no bullish or bearish divergence or any kind of failure swings. The Daily MACD is bullish as it trades above its signal line.

On the derivative front, NIFTY July futures have shed a nominal 1.61 lakh shares or 1.06% in open interest. This signifies minor profit taking at higher levels after pullback of over 300-odd points in NIFTY.

Overall, the world markets have remained flat yesterday and no major weakness have been seen there. Here, on the domestic front, there is no impending weakness or any such signals on the Daily Charts. After 300-odd points of rise, the Markets have seen minor profit taking and today it is likely to take support around its 200-DMA levels at Close. It would be important for the Markets to maintain close levels above its 200-DMA to avoid any further weakness creeping in.

All and all, today as well, we are likely to have a lacklustre session. The Markets might open weak and negative but with the opening slated around its 200-dma, we can expect some resilience. There are chances that we see the Markets trading in a range post opening and improving as we go ahead. Intraday trajectory would be important. With no bearish signals on the Charts, we continue to advice to avoid shorts. Cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, July 2, 2013

Daily Market Trend Guide -- Tuesday, July 02, 2013

MARKET REPORT July 02, 2013

The Markets continued with its smart pullback for the third day in a row as it opened on a modestly negative note but ended the day with yet another decent gain. The Markets opened on a modestly negative note and gave its intraday low of 5822.20 in the very early minutes of the trade. However, after this, the Markets soon transformed itself into rising trajectory and remained so for the rest of the session. The Markets went on to rise gradually for the entire session. It went on to give its day’s high of 5904.35 rising over 75-odd points from the day’s lows. It finally ended the day at 5898.85, posting a net gain of 56.65 points or 0.97% while forming a higher top and higher bottom on the Daily High Low charts.

MARKET TREND FOR TODAY

The Markets have risen over 300-odd points in three sessions moving past its 200 and 100 DMAs in between. Today, most probably should be a day of positive consolidation. Expect the Markets to open on a flat to mildly negative note and look for directions. Today’s session is likely to be range bound with the Markets trading in a very capped band.

For today, the levels of 5926 which is the 50-DMA of the Markets and 5960 are expected to act as immediate resistance on the Charts. The supports come in at 5848 and 5824 levels.

The lead indicators continue to point towards continuing uptrend in the immediate short term. The RSI—Relative Strength Index on the Daily Chart is 55.5247 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergences. We have reported a possible crossover of the Daily MACD. Today, MACD on the Daily Charts is bullish as it has reported a positive crossover and it now trades above its signal line.

On the Derivative front, NIFTY July futures have went on to add yet another over 9.20 lakh shares or over 6.42% in Open Interest. This is yet another indication of possible continuation of uptrend as fresh longs have been seen.

Having said this, all indicators point towards continuation of up trend. The lead indicators show potential bullish trend in the immediate short term, the Daily MACD has reported a positive crossover and the futures show continued addition of the Open Interest. This all indicate that the uptrend in the immediate short term is likely to continue.

However, since the Markets have risen over 300-odd points in last three sessions, some consolidation also cannot be ruled out. This would be positive consolidation and would be healthy for the Markets. Such consolidations usually see the Markets trade in a range. Today’s session may also see the Markets trading in a range. However, in event of any temporary weakness, the defensives like IT and Pharma may outperform. While strictly avoiding shorts continuation of positive outlook is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331