MARKET REPORT April
11, 2014
The Markets had a consolidating session yesterday very much
on predicted lines as the Markets spent the session in a listless manner and in
the end fizzled out to end the day absolutely flat. The Markets opened on a
quiet note and traded positive in the initial trade. Thereafter, Markets saw
some strength coming in as it formed its day’s high of 6819.08 in the late
morning trade. The Markets continued to trade with capped gains and in sideways
manner until the late afternoon trade. It gave up those gains in the second
half of the session as traded flat. Towards the end, the Markets also dipped
into negative territory and went on to form the day’s low of 6777.30. It
recovered from those levels to end the day absolutely flat at 6796.40, posting
a negligible gain of 0.20 points or 0.001% while forming a higher top and
higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
As we had mentioned in our yesterday’s edition of Daily
Market Trend Guide, the Markets have not yet achieved a clear breakout.
Yesterday it consolidated and today as well, expected the Markets to open on a
modestly negative note and look for directions. The Markets are likely to
remain in corrective mode as lead indicators continue to show signs of
tiredness while remaining in “overbought” territory.
For today, the levels of 6820 would continue to act as
immediate top and resistance. The supports exist much lower at 6740 and 6705
levels.
The RSI—Relative Strength Index on the Daily Charts is
76.7867 and it does not show any failure swings. It continues to trade in “overbought”
zone and also, the NIFTY has set a new 14-period high whereas the RSI has not
and this is a clear Bearish Divergence. The Daily MACD trades above its signal
line but it is likely to give a negative crossover in a day or so.
On the derivative front, the NIFTY April futures have shed
over 9.28 lakh shares or over 5.33% in total Open Interest. This very clearly
signifies offloading of positions wherein the FIIs have remained net sellers in
yesterday’s session.
Going by the pattern analysis, the Markets continues to
remain in “overbought” territory and as we mentioned in our yesterday’s edition
of Daily Market Trend Guide, the Markets have not yet given a comprehensive
breakout on the upside while it attempted to move past the previous high of
6776.15. Given this fact, this levels is likely to hold as immediate top for
the Markets and today the Markets are likely to continue with its corrective
activities.
All and all, we continue to reiterate our advice to stick to
defensives like IT and Pharma wherein we have seen massive addition of Open Interest
over past sessions. Further to this, the Markets are very less likely to clear
its previous highs and continue with its corrective activities. Because of
this, it is advised to maintain moderate exposures in the Markets while
adopting high degree of caution for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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