MARKET REPORT February
17, 2014
The Markets once a gain successfully held on to its 200-DMA
as it saw a very sharp recovery in the last hour and half of the trade on
Friday after taking support on this levels and ended the day with decent gains.
The Markets opened on a modestly positive note but soon dipped into the red
briefly in the morning trade. Thereafter, the Markets continued to trade with
very modest gains in the capped range but the afternoon trade again saw the
Markets paring its gains as it dipped once again into the negative territory
forming intraday low of 5984.60. However, the last 90-minutes of the trade saw
Markets recovering very sharply from these levels. The Markets went back into
the green and further went on to form the day’s high of 6056.40, rising almost
70-odd points from its day’s low. It finally ended the day at 6048.35, posting
a net loss of 47.25 points or 0.79% while still forming a lower top and lower
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a modestly positive
note and look for directions. The Markets are expected to continue with its up
move, at least in the initial trade. The FM shall present today Vote on Account
and the Markets are expected to react on that. However, this not being a full
fledged budget, this is very much likely to remain a non-event for the Markets.
However, some range bound but volatile movements cannot be ruled out.
The levels of 6095 and 6140 would act as immediate resistance
levels for the Markets the levels of 5981 in form of 200-DMA would continue to
act as major support at Close levels.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 41.9915 and it continues to remain neutral
without showing any bullish or bearish divergence or any failure swing. The
Daily MACD remains bearish at it trades below its signal line.
On the derivative front, NIFTY February futures have shed
over 4.51 lakh shares or 2.71% in Open interest. This shows some short covering
was seen from lower levels on Friday. We can draw two conclusions from this.
One, the spurt that we saw on Friday was not because of any fresh buying but
because of short covering from lower levels. Two, however, this also means that
the levels of 200-DMA held out as major support once again and we can now see
fresh buying coming in from these levels.
The pattern analysis of the Charts still shows no structural
breach in any manner. The Markets took support on the 200-DMA couple of
sessions back, recovered from those levels, but came back once again as the
pullback was seen without any volumes. This time as well, it has once again
taken support at its 200-DMA. With the pullback happening from this level, it
would be very critical to see if it comes with volumes.
All and all, currently with no technical breach on the
Charts as yet, the Markets may continue with its up move in the initial trade. However,
the Markets would continue to remain in broad trading range and the volumes
would play very critical part in deciding any directional bias. We continue to
advise to remain light on position and keep limited exposure while protecting profits
at any levels. Any buying, if done, should be done very selectively. Cautious
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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