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Tuesday, February 3, 2015
Daily Market Trend Guide -- Wednesday, February 04, 2015
The Markets continued to modestly correct and end the day
once again in a red in a volatile session after a positive opening. The Markets
saw a positive opening and formed its intraday high of 8837.30 in the very early
moments of the trade. After remaining briefly in the positive the Markets pared
its morning gains to trade flat. It waited for the much awaited RBI Credit Policy
and this stood out on expected lines as the RBI kept its benchmark rates
unchanged and lowered SLR by 0.50% or 50bps. After some initial knee jerk
reaction, the Markets drifted lower to form the day’s low of 8726.65 in the mid
afternoon trade. It saw a very sharp recover soon after to trade very near to
its previous close recovering much of its losses. However, it drifted again and
the Markets finally ended the day at 8756.55, posting a net loss of 40.85
points or 0.46% forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, FEBRUARY 04, 2015
Expect a quiet start to the Markets again as the RBI Policy
review remained a non event on expected lines. Speaking on technical terms, we
will continue to see the Markets remain in consolidation and in corrective
mood. The levels of 8640 will continue to act as a good pattern support at
Close levels in the immediate short term.
The levels of 8830 and 8895 will remain immediate resistance
levels for the Markets. The support will come in much lower at 8640 levels.
The RSI—Relative Strength Index on the Daily Chart is
60.9686 and it remains neutral while showing no bullish or bearish divergences
or failure swings. The Daily MACDcontinues
to remain bullish trading above its signal line.
On the derivative front, the NIFTY February futures have
added over 4.26 lakh shares or 1.71% in Open Interest. This signifies that some
amount of shorts seem to have been added in the system.
Coming to pattern analysis, as mentioned in our previous
editions of Daily Market Trend Guide, the Markets are correcting after forming
its immediate top. The Markets will remain in some corrective mode in the
immediate short term but the pattern support at 8640 will act as important
levels to watch out for.
Apart from technical structure which certainly remains
mildly bearish, the outcomes of Delhi elections will also cast its effect on
overall sentiments. Given this thing, overall primarily dominated with little
bearish technicals, the Markets may see itself continuing to correct. In event
of any up move, the Markets will continue to trade in a broad trading range.
Secotoral out performance would continue. While maintaining enough liquidity,
selective approach is advised for the day.
Consulting Technical Analyst, Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA