Friday, March 21, 2014

Daily Market Trend Guide -- Friday, March 21, 2014

MARKET REPORT                                                                                    March 21, 2014
The Markets saw a session on consolidation yesterday wherein it opened lower, remained negative throughout the session and ended the day with modest losses. The Markets opened on a negative note following mildly weak technical cues and traded with capped losses in the morning trade. In the second half of the session, the Markets after making a feeble attempt to recover, saw some more weakness creeping in as it drifted lower. It continued to show gradual slide on lower volumes and in the last minutes of the trade, went on to form the day’s low of 6473.25. The Markets hovered around those levels a bit and finally ended the day at 6483.10, posting a net loss of 40.95 points or 0.63% while forming a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to open on a modestly positive note and look for directions, however, broadly speaking, the consolidation is expected to continue. The Markets are expected to trade positive in opening trade and the intraday trajectory continues to remain critically important along with volumes to decide the trend for today. The Markets continues to trade in a  broad trading range with the levels of 6574 acting as its immediate top.

For today, the levels of 6525 and 6575 would act as its immediate resistance and the supports exist at 6455 and 6415 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 65.0513 and has moved out of an oversold area. It remains neutral as it shows no bullish or bearish divergences or any kind of failure swings. The Daily MACD continues to remain bullish as it trades above its signal line. It is moving towards reporting a bearish crossover and if this happens, we might see some longer consolidation periods for the Markets. However, as of now, this has not happened.

On the derivative front, NIFTY March futures have shed over 6.64 lakh shares or 3.33% in Open Interest. This shows some first signs of weariness in the Markets at lower levels and also signifies some shedding of long positions from higher levels.

Going by the pattern analysis, the Markets broke out on the up side from 6415 levels while forming its lifetime highs near 6574. Post this, the Markets have been consolidating in side ward trajectory and currently it continues to trade well above its lower range of the trading range and has shown no technical breach on the Daily Charts. 

All and all, the Markets are slated to open modestly positive, but are continue to trade in a range while continuing to remain in the consolidation zone. It continues to trade above its all critical support levels and therefore, in event of any downside that is seen, this should be utilized to make selective purchases. The profits on existing positions needs to be guarded vigilantly and shorts should be strictly avoided. While maintaining stock specific approach, cautious optimism is advised for today.

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


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