MARKET REPORT August
12, 2014
The Markets had a stable session yesterday wherein it opened
on a positive note, maintained its gains and ended the day with decent gains.
The Markets saw a gap up opening yesterday as it saw some 50-55 odd points of
opening gains. Post this opening, the session saw a very stable trade wherein
the Markets traded in a 20-odd points range in a sideways manner with virtually
no volatility at all in any directions. While Markets maintained its gains
throughout the session, it saw some more strength coming in the last half an
hour of trade as it gave its day’s high of 7635.55. These levels were
maintained as such and the Markets finally ended the day at 7625.95, posting a
decent gain of 57.40 points or 0.76% while forming a higher top and higher
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets have pullback after remaining “within” the
filters of its 50-DMA and have avoided a breach as of now. Today, expect the Markets
to open on a positive note once again and trade in positive at least in the
initial trade. Volumes would remain critical as the technical pullbacks require
volume to sustain. There are chances that the Markets see some profit taking at
higher levels. With today’s opening, the “gap” that was created two days back
would be filled up.
For today, the levels of 7670 and 7715 would act as
immediate resistance on the Daily Charts. The supports exist at 7600 and 7540
levels.
The RSI—Relative Strength Index on the Daily Chart is
48.4781 and it is neutral as it shows no bullish or bearish divergence or any
failure swing. The Daily MACD continues to remain bearish as it trades below
its signal line.
On the derivative front, the NIFTY August futures have added
near 3.12 lakh shares or 2.56% in Open Interest which signifies some fresh
longs have been initiated yesterday.
Going by the pattern analysis, the Markets still continues
to remaining in overall Broadening formation. However, what we saw yesterday
and what we will see today would be technical pullbacks and the levels of
50-DMA would continue to hold as support as it has not been broken as yet.
However, the Markets are not completely out of woods and it would be critically
important to have volumes for the technical pullbacks to sustain. The
possibility of the profit taking coming in again from higher levels just cannot
be ruled out.
Overall, once again a positive and stable opening is set to
happen and it would be critically important to see if the Markets capitalize on
this opening. Any strong up move that we witness should be utilized to book and
protect profits at higher levels. Fresh purchases may be made but should be
limited and more emphasis should be laid on protecting profits. Sectoral stock
specific out performance would continue. Overall, cautious optimism is advised
for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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