MARKET REPORT April
02, 2014
After remaining subdued for the entire session, the Markets
saw some last minute buying and it ended yet another day with modest gains
while remaining into overbought territory. The Markets opened on a modestly
positive note but soon dipped into the red as it pared its opening gains very
swiftly in the initial minutes of the trade. Thereafter, the Markets spent the
first half of the session trading absolutely sideways in a capped range
hovering around its previous close. It dipped further into the red in the afternoon
trade as it formed its day’s low of 6675.45. It saw some recovery coming in it not only
recovered its gains but went into positive territory forming the day’s high of
6732.25. It finally ended the day at 6721.05, posting a modest gain of 16.85
points or 0.25% while continuing to form
a mildly higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Markets remains
heavily into “overbought” territory and today it is likely to see modestly
positive opening once again. However, as appears from the Charts, though the
Markets may see some strength in the opening trade, it is likely to continue to
see consolidation from higher levels. The intraday trajectory it forms would be
very critical to decide the trend but overall, some consolidation / correction
from higher levels is overdue.
For today, the levels of 6745 and 6770 would be immediate
resistance levels for the Markets though it continues to trade in uncharted
zone. The supports would exist at 6650 and 6610 levels.
The lead indicators continue to remain overbought. The RSI—Relative
Strength Index on the Daily Chart is 79.7021 and it has reached its highest
value in last 14-days. Though it does not show any bullish or bearish
divergence, it remains in extremely “overbought” condition. The Daily MACD
trades above its signal line.
On the derivative front, the NIFTY April futures open
interest has remained virtually unchanged as it has added a nominal 11,700
shares or 0.07% in Open Interest. This very clearly indicates that there have
been no offloading of any positions and also no fresh build up of positions
that was seen.
The pattern analysis continue to depict the markets in very
much overbought condition as it is very clearly evident on the Daily Charts.
The lead indicators continue to remain in extremely overbought condition and
any continuation of up move with this pattern would certainly tend to get
unhealthy as the correction after that becomes equally or even more sharp.
Overall, the Markets may see positive opening but at the
same time, it is likely that we see some minor profit taking towards the end or
as we go ahead in the session. Some amount of consolidation / minor correction
in the Markets is overdue and such unabated up moves with this condition of
lead indicators are making the Markets unhealthy as present. It is advised to
avoid creating fresh positions and continue to protect profits at higher
levels. Overall, continuance of cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.