MARKET REPORT February
06, 2014
The Markets had a session similar to that of Tuesday as it
opened lower but recovered during the
day to end the day in green and also it held on to the support of 200-DMA for
the second time after testing it. The Markets opened on a modestly negative
note on expected lines and soon slipped to the lowest level of the day while it
formed its intraday low of 5962.05 in the early morning trade. The Markets
spent some time until early afternoon trade trading in a very capped range in
the negative territory. By afternoon, the Markets managed to recover from its
lows to trade near its previous close. The second half of the session saw the
markets crawling higher into the positive territory as it gave its intraday
high of 6028.05. The Markets finally ended the day at 6022.40, posting a net gain of 21.50 points or 0.36% while
forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a flat to modestly positive
note and look for directions. The Markets are expected to continue with its up
move at least in the initial session. The Markets have held on to the support
of 200-DMA at Close levels and are attempting a trend reversal. The intraday
trajectory and the volumes would continue to play a critical role in this.
The levels of 6045 and 6080 would act as immediate
resistance levels whereas the levels of 5976, the 200-DMA would continue to act
as major support at Close levels.
The RSI—Relative Strength Index on the daily chart is 34.53
and it is neutral without showing a failure swings or any bullish or bearish
divergences. The Daily MACD still remains bearish as it continues to trade
below its signal line.
On the derivative front, the NIFTY February futures have
added over 1.36 lakh shares or 0.84% in open interest. This signifies that
exactly like day before, the rise in the Markets have seen some more fresh
buying and not just short covering. This continues to remain a positive
indicator. The NIFTY PCR stands at 1.11 as against 1.08.
Having said this, going by the pattern analysis, the Markets
have held on to the support of 200DMA at Close levels. Any intraday dip below
this level have seen recovery coming in. The Markets are attempting to reverse
its trend. This attempt might see the Markets moving towards its 100-dma but it
will require consistent higher top and higher bottom formations with volumes to
successfully attempt a trend reversal.
All and all, we continue to advice to remain light on the
positions and avoid aggressive positions. Any profits on either side should be
protected and liquidity should be preserved. Very selective purchases may be
made. Overall, very selective stock specific purpose with mild optimism is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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