Wednesday, September 17, 2014

Daily Market Trend Guide -- Thursday, September 18, 2014



MARKET REPORT                                                                                September 17, 2014

The Markets had a volatile session and it moved in either direction before settling with modest gains after two days of losses. The Markets saw a strong opening, and proceeded to form its day’s low of 7990.65 but soon pared all of its gains subsequently to trade nearly flat.  Though quite good amount of volatility was witnessed in the trade it never really dipped into the negative. The Markets then spent the rest of the session in a capped and narrow range. It did never attempted to move upwards nor did it break down on the downside. After spending the session in this manner, the Markets finally ended the day at 7975.50, posting a modest gain of 42.60 points or 0.54% while forming a lower top and slightly higher bottom on the Daily Bar Charts.




MARKET TREND FOR THURSDAY, SEPTEMBER 18, 2014


Speaking purely on technical terms, the Markets have just halted its decline and there are chances that the weakness might continue to persist for some more time. Expect the Markets to open on a quiet note but at the same time, there are chances that it continues to bear negative bias and any rise may counter some more profit booking at higher levels. Possibilities of testing the level of 50-DMA cannot be ruled out.


The levels of 8045 and 8070 are expected to act as resistance. The supports would come in at 7820 and 7775 levels.


The RSI—Relative Strength Index on the Daily Chart is 51.4293 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD continues to remain bearish as it trades below its signal line. On the Candles,  A Bullish Harami has occurred. When such pattern is observed during a uptrend, as in case of NIFTY, this bullish harami pattern is considered bearish and signals potential continuance of the corrective activity.


On the derivative front, NIFTY September futures have shed yet another 2.82 lakh shares or 2.19% of Open Interest. This clearly indicates that profit taking and unwinding of positions have continued in the Markets.


Returning to pattern analysis, the Markets have formed a immediate top and have returned within the broadening formation. This implies bearish repercussions as such formations appear while formation of a major top. There are chances that the Markets may see pullbacks but these are likely to remain in overall downward bias of the Markets.


Overall, it is clear that any uptrend that the Markets will now see are likely to remain short lived and might be encountered with selling pressure from higher levels. Any purchases should be kept limited to non-index components and defensives. This should be done selectively and only if such sectoral indices are not overbought or have given sell signals. While maintaining much vigil, cautious approach should be continued.


Milan Vaishnav,

Consulting Technical Analyst,



+91-98250-16331






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