MARKET REPORT September
01, 2014
The Markets had a lesser than expected volatile session on
Thursday, on the day of expiry as it traded in a given range to end the day
with minor gains. The Markets opened on a positive note and formed its intraday
high of 7967.90 in the very early minutes of the trade. Thereafter, the Markets
traded with modest gains in a capped range. The rest of the session saw the
Markets gradually paring gains as it came of from intraday high levels.
However, it did not really saw any pressure as no aggressive downside was
observed. It kept gradually paring gains but continued to overall trade in a
range and maintained to trade in the positive trajectory. It finally ended the
day at 7954.35, posting a net gain of 18.30 points or 0.23% while forming a
higher top and higher bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, SEPTEMBER 01, 2014
Markets would wake up from a slumber of three days as Friday
was a trading holiday on account of Ganesh Chaturthi. GDP numbers, that came in
Friday evening are certainly on expected lines which saw the growth figures at
27 month high. This is likely to have its effect in opening tomorrow. Markets
may open on a positive note and test its upper trend levels of the broadening
formation and might even test 8000 mark while still remaining in the broad
trading range.
The levels of 7970 and 8025 would act as immediate
resistance levels. The supports come in at 7860 and 7800 levels.
The RSI—Relative Strength Index on the Daily Chart is
66.0750 and it has reached its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergence as such. The Daily MACD
remains bullish while trading above its signal line. On the Weekly Charts, the
RSI is 70.2767 and it now trades in “overbought” territory. Also, though it
does not show any failure swings, the NIFTY has posted a fresh Weekly High in
last 14-periods whereas RSI has not and this is clear Bearish Divergence on the
Weekly Charts. The Weekly MACD continues to trade above its signal line.
On the derivative front, the NIFTY September futures added
over 50.81 lakhs shares or 46.74% on the expiry day of the August Series.
Returning to pattern analysis, it should be noted in a very
clear terms that if we analyse the broadening formation on the Daily Close
(line) Charts, on which it holds significance, the Markets have gap of going up
to and closing bit above 8000 levels. However, it would still mean that the
Markets are within the rising trend line drawn and would not imply a breakout
on the upside. Further to this, if we read the lead indicators which are
overbought on the weekly charts, the Markets still very much continue to remain
in the process of creating a major top.
Keeping in line with the above reading, we would still like
to stick to a word of great caution. Even with some positive and strong opening
we might get, it is very strongly advised not to get carried away with the
upside as the Markets may mark a major top at any given point. Fresh purchases
should be kept limited to individual specific stocks among other defensives and
profits should be protected heavily. Overall, positive caution is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
