Thursday, February 13, 2014

Daily Market Trend Guide -- Thursday, February 13, 2014

MARKET REPORT                                                                                February 13, 2014
The Markets inched upwards for the second day in a row but the session visibly remained dominated with caution and lack of conviction as the Markets grew cautious ahead of the December IIP and January CPI data that were slated to come after market hours yesterday. The Markets opened on a positive note and in the morning trade; gradually inched upwards to form the day’s high of 6106.60 in the late morning trade. However, the Markets saw some sluggishness returning and it formed a falling channel thereafter and spent the entire session in that trajectory. It came off from its day’s high but maintained modest gains. It finally ended the day at 6084, posting a net gain of 21.30 points or 0.35% while forming a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The December IIP data and the January CPI data that came in yesterday are more or less in line with the what the Markets expected though the December IIP contracted little bit more at -0.6% as against expectation of -0.1%. The Markets have overall discounted this data and no major reaction to this should be seen. The Markets will open again on a quiet note attempting for find direction. Absence of volumes and conviction are keeping Markets in this condition.

For today, the levels of 6110 and 6150 would act as immediate resistance for the Markets. The supports exist at 6070 and 6045 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is  43.3285 and it continues to remain neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to trade below its signal line but is moving towards a positive crossover. 

On the derivative front, NIFTY February futures have shed over 3.87 lakh shares or 2.44% in Open Interest. This signifies some short covering in the Markets in yesterday’s session. This is likely to keep the Markets in the consolidation zone for some more time. It would be very important to see if this gets replaced with fresh buying.

The Markets have been inching upwards in past couple of session but the main concern that has remained in this pullback has been the lack of volumes. The low level participation on the days when the Markets are rising reflects the lack of directional bias and lack of consensus. Given this thing, it is likely that the Markets remains in consolidation for some more time. It has major resistance near 6150 levels in form of a pattern resistance as well as 100-DMA. To confirm the reversal of the trend, the Markets will have to move past the levels of 6150 with volumes and conviction.

All and all, while keeping the analysis on the similar lines, we continue to advice to refrain from creating aggressive positions on either side. While protection of profits would be extremely important, purchases may be done very selectively. It is advised to maintain adequate liquidity until the directional bias is achieved while maintaining a positive caution on the Markets.

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

   

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