Daily Market Trend Guide -- Monday, November 10, 2014

MARKET REPORT                                                                                November 07, 2014

The Markets on Friday once again continued to tread the dotted lines as analyzed as it consolidated once again to end the day virtually flat. The Markets opened on a quiet note and soon formed  its intraday high of 8360.35 in the early minutes of the trade. Thereafter, the Markets soon dipped into the negative territory. This negative territory got bit deeper as the Markets soon formed its low point of the day at 8290.25 in the late morning trade. The Markets spent rest of the session from recovering from these lows. Throughout the session it kept gradually recovering and in the final hour of the trade it recouped all of its losses to trade flat near the previous close. It finally ended the day at 8337, posting very nominal loss of 1.30 points or 0.02% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR MONDAY, NOVEMBER 10, 2014

The Markets are expected to see a quiet opening but looking at the Daily and Weekly Charts, there are all chances that the Markets would continue to consolidate amid some volatility ingrained in it. In event of any up move or positive opening some profit taking from higher levels just cannot be ruled out. Therefore, the analysis continues to remain more or less on similar lines.

The levels of 8365 and 8390 would continue to act as resistance and the levels of 8270 and 8215 would continue to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 71.4728 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. However, it continues to trade in “overbought” territory. The Daily MACD remains bullish trading above its signal line. On the Weekly Chart, the Weekly RSI is 70.6109 and it trades in “overbought” territory. The NIFTY has also formed a fresh 14-period weekly high but Weekly RSI has not and therefore it shows a Bearish Divergence. The Weekly MACD remains bearish as it trades below its signal line.

On the derivative front, NIFTY November futures have added over 3.78 lakhs shares or 1.67% in Open Interest. This shows continuation of building of fresh longs in the segment.

While taking a look at pattern analysis, the Markets on Daily and more on Weekly Charts have very distinctly tested the upper rising trend line of a broadening formation. As mentioned often in our previous editions of Daily Market Trend Guide, it is this formation which is disallowing the Markets to post a clear breakout. Under the given circumstances, it is likely that the Markets may not see a runaway rise and might be prone to consolidation at higher levels with a mild downward bias.

Reading this along with F&O data, there are chances that the Markets would see some profit taking pressure at higher levels. This may get reduced to range bound consolidation but volatility would continue to remain. Stock specific  action would continue. While selective purchases may be made more emphasis should be laid on protecting profits. Overall, cautious optimism is advised.

Milan Vaishnav,

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

www.MyMoneyPlant.co.in

http://milan-vaishnav.blogspot.com

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