MARKET REPORT September
15, 2014
The Markets corrected in today’s session, quite on expected
lines on lines of weak IIP numbers that came in on Friday and on equally unfavourable
technical indicators. The Markets saw a near gap down opening as it opened a
notch lower but spent most of the session in a very narrow and capped range.
The Markets did not drift much lower during the day but at the same time did
not made any attempt to recover from lower levels as well. While continuing to
trade sideways, it formed a day’s low of 8030 in the late afternoon trade. As
mentioned, once again no major recovery from lower levels was seen and the
Markets finally ended the day at 8042, posting a net loss of 63.50 points or
0.78% while forming a distinctly lower top and lower bottom on the Daily Bar
Charts.
MARKET TREND FOR TUESDAY, SEPTEMBER 16, 2014
The Markets have conformed one thing as of now that the
breakout it had attempted has not been validated and it has bought itself back
into the broad channel that it has formed. Tomorrow, we can expect to see a
mildly negative opening again. Technically speaking, the Markets should continue
with its downward drift. However, even
in case of any small pullback, it would continue within the broad channel and
would continue to resist to the rising line.
The levels of 8100 and 8130 would act as immediate
resistance and the levels of 7960 and 7910 would act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is
57.9557 and it has reached its lowest value in last 14-days which is bearish.
Further, the RSI has formed a fresh 14-period low whereas NIFTY has not yet and
this is clear bearish divergence. The Daily MACD has reported a negative
crossover as precisely predicted in our previous editions and it now trades
below its signal line which is bearish indication.
On the derivative front, NIFTY September futures have went
on to shed yet another 2.43 lakh shares or 1.78% in Open Interest. This
signifies that that there has been continuance of unwinding of positions or
profit taking and no fresh shorts have been created.
Going back to pattern analysis, the Markets have failed to
confirm a breakout. Its movement past the rising trend line of the broad
channel has proved to be a false signal or a whipsaw and with today’s close, it
is back again in the broadening channel. As of now, the levels of 8180 has
become a immediate top for the Markets and no runaway rise would occur until
the Markets moves past this level.
Overall, the advisory remains more or less on similar lines
like that of yesterday. We continue to reiterate to refrain from making major
purchases but to keep them very much selective in stock specific and non-index
components. Though sectoral out performance would continue, it is best advised
to keep overall leverage under control. Cautious outlook is advised for the
day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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