Tuesday, February 25, 2014

Daily Market Trend Guide -- Tuesday, February 25, 2014

MARKET REPORT                                                                               February 25, 2014
After opening on a negative note the Markets inched up for the second day in a row and ended the day with modest gains. The Markets saw a negative opening as it opened modestly down. However, after opening on the negative note, it formed its intraday low of 6130.80 in the early minutes of the trade. The Markets saw itself trading in negative territory in the morning trade but it had remained in upward rising channel since opening. This saw the Markets taking itself in the positive zone by late morning trade. The Markets for the rest of the session remained in upward rising trajectory for the rest of the session and also moved past its 100-DMA and 50-DMA as it kept making gradual intraday lows. It went on to mark the day’s high of 6191.85 and finally ended  the day at 6186.10, posting a modest gain of 30.65 points or 0.50% while continuing to form a higher top and higher bottom on the Daily High Low Charts.


The Markets are expected to open on a modestly positive note and continue with its up move at least in the initial trade. The session would remain dominated today with the rollovers as we enter the penultimate day of the expiry. Tomorrow would be the expiry of the current month, as Thursday is a trading holiday. The Markets are likely to find resistance near their opening levels and we may see some capped volatility today.

For today, the levels of 6215 and 6250 are immediate resistance levels for the Markets. The supports would exit at 6150 levels and further down at 6125.

The RSI—Relative Strength Index on the Daily Chart is 56.0147 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 remain bullish as it trades above its signal line.
On the derivative front rollovers continued as the NIFTY February futures shed over 15.94 lakh shares or 11.41% in Open Interest whereas the March futures added 20.73 lakh shares or 55.14% in the Open Interest.

On the Daily Charts, the Markets have neared its pattern resistance levels. There is a minor double top resistance at 6190 levels. This has been created by the gap down opening that the Markets saw on the 27th of January. The Markets are likely to see some resistance between 6190 and 6120 levels. This is likely to cause the Markets to once again see a ranged consolidation or even some minor correction.

All and all, with the session expected to remain dominated with expiry, it is likely to see a range session with some amount of volatility ingrained in it. However, it is best advised to avoid creating any short positions. Sectoral out performance would continue and it is advised to have very select and stock specific approach while protecting profits vigilantly at higher levels. 

Milan Vaishnav,
Consulting Technical Analyst,

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