MARKET REPORT May
13, 2015
The Markets once
again saw selling pressure yesterday and wiped out major part of the two days of
gains as it ended the day once again with a deep cut. The Markets saw worse
than expected opening as it opened on a weaker note and remained in downward
trajectory for the entire session. Post weak opening, the Markets traded in a
ranged losses and it weakened further in the afternoon trade. It continued to
remain in downward channel while forming gradual fresh lows. It went on to form
the day’s low of 8115.30 in the final minutes of the trade. No major recovery
was seen and the Markets finally settled the day at 8126.95, posting a net loss
of 198.30 points or 2.38% while forming a similar top but sharply lower bottom
on the Daily Bar Charts.
MARKET TREND
FOR WEDNESDAY, MAY 13, 2015
Markets are likely
to open today on a modestly positive note and thereby attempt to find some
bottom and also attempt a relief rally. However, at this juncture, it becomes
extremely important to note that the rallies that we saw on Friday and on
Monday were fuelled by massive short covering and there was total absence of
any delivery based buying. It would be necessary for the Markets to see some
buying over and above short covering in order to confirm the bottom and attempt
a reversal on the upside.
For today, the
levels of 8180 and 8280 are immediate resistance for the Markets. Supports come
in at 8065 and 7995 levels.
The RSI—Relative Strength
Index on the Daily Chart is 39.6345 and it remains neutral as it shows no
bullish or bearish divergence or any failure swing. The Daily MACD remains
bearish while trading below its signal line.
On the derivative
front, the NIFTY May futures have added over 4.34 lakh shares or 3.18% in Open
Interest. This is the first time that the Markets have added OI while on
decline. This indicates that the Markets have added good amount of shorts in the
system. Also, the NIFTY premium has declined to its lowest levels in recent
time. These are the faint signs that the Markets are attempting to find a
bottom.
Coming to pattern
analysis, the way the Markets are disregarding the important levels of 200-DMA,
it is very clear that it is reacting to external factors and while doing so, it
is attempting to find its bottom. Having said this, it still becomes important
to note that while on its way up again in an attempt to recover, this level of
200-DMA is expected to remain a resistance for the Markets on the upside. Until
it moves past this level, we will continue to see some pressure on the Markets
in the immediate short term. Overall, the Markets have formed a broad range of
8000-8325 levels as of today.
Overall, as
mentioned above, though some positive opening can be expected, the Markets are
still not out of the woods at all. Apart from short covering which is likely,
we desperately need to see fresh delivery based buying and this is what is
required to support the Markets and make a successful reversal. It is advised
to continue to refrain from any aggressive positions while maintaining cautious
outlook on the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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