Wednesday, February 12, 2014

Daily Market Trend Guide -- Wednesday, February 12, 2014

MARKET REPORT                                                                                February 12, 2014
The Markets continued to have a range bound session wherein it continued to consolidate for the third day in a row while ending the day with minor gains. The Markets opened on a positive note on expected line and in the early minutes of the trade, pared some of its gains to trade flat. The Markets saw some strength coming in the morning trade as it gradually inched upwards to give the day’s high of 6081.85. The seconde half of the day saw the Markets paring these gains again to trade on a flat note. The Markets spent the second half of the session while trading in a extremely capped range. It finally ended the day at 6062.70, posting a minor gain of 9.25 points or 0.15% while forming a similar top and slightly higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

After pulling back from its lows of 5933 levels, the Markets have spent the last three sessions while consolidating in a much capped range. Today, we can expect the Markets to open on a decently positive note and continue with its up move. However, as outlined in our previous editions of Daily Market Trend Guide, it would be important for the Markets to maintain these opening gains and capitalize on it. With December IIP data and January CPI data coming in after Market hours, the Markets are again set to spend the day in a range.

For today, the levels of 6090 and 6145 are immediate resistance levels on the Charts. The supports come in much lower at 6025 and 5980 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 40.3487 and it continues to remain neutral without showing any failure swings or any kind of bullish or bearish divergences. T he Daily MACD trades below its signal line.
On the derivative front, the NIFTY February futures have added over 4.80 lakh shares or 3.11% in Open Interest. This shows that some fresh positions have been added in yesterday’s trade and the Markets are likely to continue with its up move, at least in the initial session.

As mentioned above, the Markets have been consolidating for last three sessions after its pullback. Going by the pattern analysis, the Markets are likely to inch upwards towards its 100-DMA levels and again face some resistance and consolidation. It would confirm its trend reversal only after it moves past its 100-DMA with volumes and good amount of participation.

All and all, it is continued to advise to keep avoiding aggressive positions in the  Markets. Heavy exposures should be avoided. Any rise should be used to  book profits wherever it exists and making highly selective purchases. Both profits and amount of exposures should be heavily guarded until the directional bias is clearly established. Overall, continuance of positive caution is advised for today.

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


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