MARKET REPORT October
22, 2013
Though the Markets ended the day with nominal gains, it had
more of a corrective session yesterday as it moved in either direction and
remained range bound through out the day. The Markets opened on a positive note
and soon made its intraday high of 6218.95 in the early hour of the trade.
Thereafter, the Markets gradually corrected as it pared its gains and dipped
into the negative and dipped into the red. It made an feeble attempt to recover
but went on to give the day’s low of 6163.30. However, the last hour of the
trade saw some recovery coming in lower volumes as the Markets recovered its
losses to trade back in the green. It finally ended the day at 6204.95, posting
a net gain of 15.60 points or 0.25% while forming a higher top and higher
bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
The resistance zone of 6230-6250 have held out yesterday as
the Markets have failed to move past these levels. Today as well, the Markets
are likely to open on a modestly negative note and continue with its corrective
/ consolidation activity and the levels mentioned would continue to act as key
resistance zone.
For today, the levels of 6230 and 6250 would act as key
resistance levels. The supports come in lower at 6155 and 6110 levels.
The RSI—Relative Strength Index on the daily charts is
67.8025 and it has reached its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergence. The Daily MACD continues to
trade above its signal line.
On the derivative front, NIFTY October futures have shed a
nominal 3.11 lakh shares or 1.65% in Open Interest. This show some minor
shedding of long positions and some unwinding at higher levels as well.
Going by the pattern analysis, it is very clear, as evident
from the charts that the Markets have resisted at their key resistance levels
of 6230-6250 and until these levels are breached there would be no sustainable
up move in the Markets. Also, until these levels are breach, on the similar lines, they would continue to act as key resistance zone for
the Markets.
All and all, it is very much likely that the Markets opens
negative and continue with its corrective activities at least in the initial
trade. Long positions should be taken very selective as selective sectoral out
performance would be certainly seen. Aggressive positions and over exposure
along with shorts should be avoided. While keeping an vigilant eye on profits
at higher levels, cautiously positive approach is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
