MARKET REPORT June
30, 2014
The Markets continued to spend the Friday’s session in
consolidation as it moved in a extremely capped range and struggled to keep its
head above its crucial short term support levels of 7500-7510. The markets
opened on a positive note and soon formed its intraday high of 7538.75 in the
early minutes of the trade. After hovering around those levels for a while, the
Markets started gradually paring gains. In the afternoon trade, the Markets
pared all of its opening gains as and it also dipped into the negative while
forming its day’s low of 7482.30. However, the second half of the session saw
some mild recovery coming in as the Markets crawled back into the green. It
finally ended the day at 7508.80, posting a minor gain of 15.60 points or 0.21%
while forming a lower top and similar bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, the Markets are likely to open on a flat to mildly
positive note and look for directions. There are high chances that the Markets
trade more or less like Friday and continue to consolidate. It would be
important for the Markets to manage to keep its head above the levels of
7500-7510 and any dip below this would induce further weakness in the Markets.
For today, the levels of 7535 and 7560 would act as
immediate resistance levels whereas the levels of 7460 and 7410 would act as immediate
supports.
The RSI—Relative Strength Index on the Daily Chart is
56.0144 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD remains bearish as it trades below its signal
line. On the Weekly Charts, RSI is 74.3818 and it is neutral without showing
any bullish or bearish divergences. However, on the Weekly Charts, it continues
to trade in “overbought” territory. The Weekly MACD is bullish but in trades in
“overbought” range as well.
On the derivative note, the NIFTY July futures have shed
over 1.65 lakh shares or 1.17% in Open
Interest. This indicates some offloading in Friday’s session as well.
Going by the pattern analysis, it is clear that the Markets
are struggling to keep its head above its crucial support levels of 7500-7510
levels. Further to this, if we go by the F&O data it clearly points towards
consistent shedding of OI , if not at once than gradually. Further, going by
the lead indicators, the Weekly Indicators are absolutely in “overbought”
territory. This clearly suggests that the Markets will continue to consolidate
with clear bias towards some more weakness creeping in.
Overall, with reference to the above reading, it may happen
again that we see a positive opening in the Markets but as we go ahead in the
session, we may again see the Markets consolidating with negative bias. With
the chances of the Markets paring gains in the later part of the day, we
continue to reiterate the policy of keeping exposures limited to defensives and
keeping them at moderate levels as well. Overall, continuance of cautious
approach is advised for today as well.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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