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Wednesday, January 28, 2015
Daily Market Trend Guide -- Thursday, January 29, 2015
The Markets remained utterly volatile on Wednesday as it
resisted precisely at the upper rising trend line and ended the day flat after
wild swings. The Markets saw a quiet opening on expected lines and traded into
negative in the morning trade, though with capped losses. However, later in the
day, the Markets saw a sharp up move while it gathered strength. It went on to
post a fresh lifetime high of 8985.05 in the mid session. However, at this
time,selling pressure and profit taking
at higher levels weighed in as mentioned in our previous edition of Daily
Market Trend Guide. This saw the Markets paring all of its gains in the second
half of the session. It further went on to dip into negative to form the day’s
low of 8874.05, losing over 100-odd points from the high point of the day. It
finally settled the day flat at 8914.30, posting a negligible gain of 3.80
points or 0.04% while continuing to form a higher top and higher bottom on the
Daily Bar Charts.
MARKET TREND FOR
THURSDAY, JANUARY 29, 2015
We can expect the Markets to see a stable and quiet opening
but at the same time, it becomes very important to note that though the Markets
have demonstrated good amount of strength by a flat close, it has potentially
formed a immediate top for itself at 8985 levels. Even if the undercurrent
which remains certainly intact, some amount of ranged consolidation coupled
with mild profit taking cannot be ruled out. Further, we enter the expiry day
of the current derivative series and therefore the session would continue to
remain dominated with rollovers.
The levels of 8985 would now act as immediate resistance and
the supports would come in at 8820 and 8750 levels on the lower side.
The RSI—Relative Strength Index on the Daily Chart is
75.7446 and it has reached its highest value in last 14-days which is bullish.
However, it now clearly trades in “overbought” zone and shows no bullish or
bearish divergence. The Daily MACD remains bullish trading above its signal
On the derivative front, rollovers continued as NIFTY
February series added over 84.04 lakh shares or 69.91% in Open Interest.
Taking a cue from pattern analysis, as mentioned in our
yesterday’s edition of Daily Market Trend Guide, the Markets have now resisted
precisely at the upper rising trend line as evident on the Daily Charts. Having
said this, even if the sentiment remains buoyant, some amount of consolidation
or mild profit taking from higher levels continue to remain imminent. Also, the
levels of 8985 would now act as immediate top for the Markets.
Overall, given the technical structure of the Charts, with
the Markets resisting precisely at the upper rising trend line and further
coupled with the fact that it trades “overbought”, it is very likely to see
retracements with each up move. Though there may not be any significant
correction, but this range bound consolidation will certainly have high degree
of volatility ingrained in it. Under such scenario, we continue to reiterate
very vigilant protection of profits at higher levels.
Technical Analyst, Af. Member: Market Technicians
Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA