Friday, February 7, 2014

Daily Market Trend Guide -- Friday, February 07, 2014

MARKET REPORT                                                                                   February 07, 2014
The Markets had an extremely choppy session yesterday as it saw a very volatile trade on either side which finally resulted in the Markets ending with nominal gains. The Markets opened on a modestly positive note and formed its intraday high of 6048.35 in the early morning trade. However, after trading briefly in a capped range the Markets saw a very sudden and sharp fall. It dipped very sharply in the negative in a vertical fall and formed its intraday low of 5965.40. After forming this low in the late morning trade itself, the Markets formed a rising trajectory thereafter and recovered in the rest of the session.  The Markets gradually recovered all of its losses in the rest of the session and traded in the green towards the end. It finally managed to end the day at 6036.30 posting a nominal gain of 13.90 points or 0.23% while forming a higher top and similar bottom on the Daily Charts.


MARKET TREND FOR TODAY

The Markets have taken support for three times in last three session and have successfully managed to keep its head above the levels of 200-DMA at Close. Today, expect the Markets to open on a decently positive  note and continue with its up move. The global cues are supportive as the US Markets too have ended in the green after a pullback post falling below its 200-DMA. The intraday trajectory would continue remain important.

For today, the levels of 6075 and 6135 would act as immediate resistance on the Charts. The supports exists at 5977 and 5940 levels.

The RSI—Relative Strength Index on the Daily Chart is 36.67 and it continues to remain neutral without showing any bullish or bearish divergence or failure swings. The Daily MACD remains bearish as it trades below its signal line.

On the derivative front, NIFTY February futures have shed 3.41 lakh shares or 2.08% in open interest. This shows some profit taking has been seen in the rise that we saw yesterday and the pullback may be because of short covering from lower levels. In either case, this signifies that a bottom has been attempted at the levels near the 200-DMA.It remains to be seen if we see fresh long positions getting built up after this. In any case, both FIIs and DIIs have remained net buyers in both derivative and cash segments yesterday.

Going by the pattern analysis, the Markets have attempted to find a bottom and reverse its trend. It is likely to continue with the advance today with a positive opening and might resist around its 100-DMA levels. It would consolidate around those levels again and only after that it can be confirmed that a trend reversal has happened if it moves beyond those critical resistance levels.

Overall, today, we are set to see a positive opening and the positive moves shall continue. The intraday trajectory would be important and the Markets will have to remain in rising trajectory in order to capitalize on the gains. Select buying can be done while protecting profits at higher levels. Overall, cautiously positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331



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