Sunday, October 26, 2014

Daily Market Trend Guide -- Monday, October 27, 2014

MARKET REPORT                                                                                   October 23, 2014
The Markets traded for a  Mahurat session on Thursday, 23rd of October for an hour and spent the hour of the trade on expected lines. The Markets saw a positive opening and after opening in the positive, the Markets traded for entire hour in a sideways trajectory. In the first quarter of the hour of trade, the  Markets touched the day’s high of 8031.75. Thereafter, after spending the rest of the time in a sideways trajectory, it came off a bit from those levels. The Markets finally ended the day at 8014.55, posting a net gain of 18.65 points or 0.23% while forming yet another higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR MONDAY, OCTOBER 27, 2014 

The Markets have formed minor gaps in the previous two sessions and this may act in either way so far as Markets performance is concerned. It can either lend technical strength to the Markets, or may cause the Markets to consolidate in order to fill those gaps. However, with the global markets stable, we can expect a positive opening in the Markets initially but at the same time cannot rule out the possibility of some consolidation in immediate short term.

The levels of 8045 and 8080 would act as resistance and the levels of 7974 and 7940 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 56.0749 and it has reached its highest value in last 14-days which is bullish. Though it does not show any bullish or bearish divergences. The Daily MACD is bullish as it trades above its signal line. A rising window occurred  (where the top of the previous shadow is below the bottom of the current shadow).  This usually implies a continuation of a bullish trend.  There have been 11 rising windows in the last 50 candles--this makes the current rising window even more bullish. However, the formation of such candle can be attributed to a very short session of trade. On the Weekly Charts, the Weekly RSI is 64.2845 and it remains neutral without showing any bullish or bearish divergences or any failure swing. The Weekly MACD remains bearish while trading below its signal line. 

On the derivative front, the NIFTY October futures have shed over 1.47 lakh shares or 0.86% in Open Interest. In the coming week, this standalone figure would be of little use as it would be a expiry week and rollovers would begin across segments.

Coming to pattern analysis, the Markets continue to remain in a broad trading range. It has taken support on 100-DMA twice and on Thursday, also attempted to move past the levels of 50-DMA. In event of any consolidation, the levels of 50-DMA should act as support at Close. Reading the Daily Charts along with the Weekly Charts, there are fair chances that the Markets continue to remain in a broad trading range while consolidating with some amount of volatility ingrained in it.

Overall, Markets may witness some ranged movement and might also see some profit taking from higher levels. Any up move should be continued to be utilized to protect profits. Stock specific purchases may be made as secotoral rotation and out performance would continue. Positive outlook with a tinge of caution is advised for the day.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA

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