MARKET REPORT March
19, 2014
The Markets saw sever consolidation continuing as it opened
on a stronger note, scaled its lifetime highs but pared most of its gains
towards the end. The Markets however ended mildly on positive not but got
“overbought” once again as well. The Markets opened on a positive note and
gained further strength as it made its fresh life time high of 6574.95 in the
late morning trade. The Markets later started seeing some mild profit taking
and some more addition of short position as it started paring gains during the
remaining part of the session. The Markets pared all of its gains by late
afternoon trade as it dipped very briefly into negative while forming day’s low
of 6497.65. It crawled back into the green and finally ended the day at
6516.65, posting a modest gain of 12.45 points or 0.19% while forming a higher
top and higher bottom on the Daily High Low charts.
MARKET TREND FOR TODAY
Today’s session would continue to remain critical for the
Markets. The Markets are likely to open on a modestly positive note and
continue with its up move but the Markets are “overbought” and this would keep
the Markets from giving any runaway gains. The Markets are overall likely to
continue to remain in a trading range and continue with its consolidation.
For today, the levels of 6530 and 6575 would act as
immediate resistance levels for the Markets. The supports exist at 6480 and
6455 levels.
The RSI—Relative Strength Index on the Daily Chart is
70.5868 and it trades in overbought territory again. At the same time, it
continues to remain neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD continues to trade above its signal line and is
therefore bullish.
On the derivative front, NIFTY March futures have added over
2.85 lakh shares or 1.47% in Open
Interest. This signifies that even when the Markets pared its gains
during the day, shorts positions have been added and no offloading has been
witnessed. The pattern of FIIs selling in futures and buying heavily in cash
segment continued.
Going by the pattern analysis, the Markets have given their
lifetime highs again in yesterday’s session. However, it has not broken out of
the broad trading range that it has been consolidating in. Also, yesterday’s
modest up move has once again taken Markets in “overbought” territory. There is
a strong likelihood that the Markets still continues to remain overbought and
consolidates instead of a clean breakout.
All and all, the “overbought” lead indicators would keep the
Markets in check for some more time and keep them in consolidation phase.
However, the undercurrent remains extremely buoyant and this would see more or
sectoral churning than any major profit taking. It is advised to keep strong vigil
on existing profits on higher levels and any downside should be used to make
stock specific purchases. While strictly avoiding shorts, positive outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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