Daily Market Trend Guide -- Friday, March 07, 2014

MARKET REPORT                                                                                  March 07, 2014

Fuelled by massive FII buying which following narrowing of current account deficit, the Markets yesterday closed at its lifetime highs as it ended the session with a decent gain. The Markets opened on a positive note and traded decently positive but in sideward trajectory in the first half of the session. In this first half, the Markets sustained decent gains on good volumes but continued to resist at its double top resistance levels. The second half of the session saw the Markets gaining further strength as the Markets perked up higher and then until the end of the session kept making new intraday highs gradually. It went on to post the day’s high of 6406.60 towards the end of the session and finally ended the day at 6401.15, posting a robust gain of 72.50 points or 1.15% while forming a sharply higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today would be a very critical session for the Markets. The Markets are slated to open on a decently positive note and this opening will see the Markets going to their all time highs. However, this would also make the Markets very near to the overbought territory and there are fair amount of chances that we encounter consolidation again at higher levels. The intraday trajectory would continue to occupy the centre stage along with volumes.

For today, the Markets will see it trading at its life time highs once it moves past 6415 levels. The supports exists at 6350 and 6310 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 68.9202 and it has reached its highest value in last 14-days which is bullish. The Daily MACD remains bullish as it continues to trade above its signal line. On the Candles, A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.

On the derivative front, NIFTY March futures has went on to add over 4.35 lakh shares or 2.83%  in Open Interest. This indicates continuation of fresh buying and creation of fresh longs in yesterday’s session. The NIFTY PCR stands at 1.14 as against 1.03 yesterday.

Going by the pattern analysis, the Markets have moved past its minor double top resistance which was 6350 levels and moved towards the all time intraday high of 6415. Today’s opening would see it trading above the all time high which technical should act as either resistance (in case of lower opening) or support if the Markets opens above that. This makes a ground for the Markets to open higher and consolidate from higher levels again.

All and all, with the positive opening likely, the Markets would see itself trading at its all time highs. Given this, there are fair chances that we see consolidation returning. There are chances that the Markets see some mild profit taking from higher levels as today’s up move would take the Markets very near to its overbought territory. It is advised to very  vigilantly guard profits at higher levels and not to resort to blind buying. Baring some consolidation which is expected at higher levels, the under current continues to remain very much intact. Cautiously positive outlook is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
www.MyMoneyPlant.co.in
http://milan-vaishnav.blogspot.com
+91-98250-16331 

milanvaishnav@mymoneyplant.co.in

milanvaishnav@yahoo.com