Thursday, January 22, 2015

Daily Market Trend Guide -- Friday, January 23, 2015

MARKET REPORT                                                                                   January 23, 2015
The Markets continued its up move and surged ahead while marking fresh lifetime highs but also clearly shows signed of some weariness while it ended the day with modest gains yet again. The Markets saw a modestly positive start and post modestly positive opening it added to its gains a bit in the morning trade. However, it pared most of its gains while remaining in extremely ranged bound manner by late afternoon trade as it also dipped slightly in the negative for a very brief period. The last hour and half of the trade saw the recovery and the Markets went near to its morning highs. It also went on to form the day’s high of 8741.85 towards the end. It finally settled the day at 8761.40, posting a net gain of 31.90 points or 0.37% while continuing to form a higher top and higher bottom on the Daily Bar Charts.

The Markets are now trading in uncharted territory and technically speaking, they are set to continue with its up move. Given this thing, we can expect a flat to modestly positive start to the session but at the same time, the Markets are also continuing to show some signs of tiredness and this may result into consolidation at higher levels or some mild profit taking while keeping the original trend intact.

The levels of 8775 and 8830 are likely to act as immediate resistance while support come in much lower at 8690 and 8610 levels.

The RSI—Relative Strength Index on the Daily Chart is 71.1620 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence but it now trades in “overbought” zone which is a thing of mild concern. The Daily MACD continues to remain bullish while trading above its signal line.

On the derivative front, the NIFTY January futures have went on add yet another over 4.54 lakh shares or 2.05% in Open Interest. This is a positive indicator showing continuing addition of fresh positions in the Markets on the long side.

Returning to pattern analysis, the Markets are continuing to surge ahead after it broke out on the upside moving past its previous top. However, now that Markets have added some gains moving past this level, it is showing some signs of tiredness at higher levels. The original up trend remains absolutely intact and this is supported by F&O data as well. However, there are fair chances that the Markets may take some breather and this may result into consolidation at higher levels or very mild profit taking.

Overall, taking this picture in view, one can certainly continue to make fresh purchases given the original trend remaining intact. However, as we have mentioned in our previous edition, the same amount of vigilant attention is required to protect profits at higher levels. Continuance of cautious optimism 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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