MARKET REPORT June
24, 2014
What seemed to be a fresh correction setting in to the
Markets turned out to be a mere consolidation again as the Markets recovered
most of its losses in the last 30-minutes of trade to end with just a modest
loss. The Markets opened on a mildly positive note and formed its day’s high of
7534.80 in the early minutes of the trade. After briefly trading into the green
the Markets slipped into the negative territory and remained in the negative
for the rest of the entire session. It went on to gradually making fresh lows
and in the late afternoon trade, went on to form the day’s low of 7441.60,
slipping over 90-odd points from the intraday high. However, last 25-30 minutes
of trade saw sharp short covering from lower levels. Markets recovered bulk of
its losses and finally ended the day at 7493.35, posting a net loss of 18.10
points or 0.24% while forming a lower top and lower bottom on the Daily High
Low Charts.
MARKET TREND FOR TODAY
Today as well, expect the Markets to open on a positive note
and look for directions. As evident on the Charts, the levels of 7510-7515
would be crucial and any slippage or trading below these levels would induce
further weakness in the Markets. With rollovers started, the session would also
remain dominated with rollover activities. Given the pattern analysis and the
lead indicators, the chances of corrective activities continuing are high.
For today, the levels of 7520 and 7565 would act as
immediate resistance for the Markets. The supports exist much lower at 7445 and
7410 levels.
The lead indicators continue to paint a weak picture on the
Daily Charts. The RSI—Relative Strength Index on the Daily Chart is 57.5188 and
it has reached its lowest value in last 14-days which is Bearish. Also, the RSI
has set a fresh 14-day low whereas NIFTY has not yet and this is continuance of
clear Bearish Divergence. The Daily MACD continues to trade below its signal
line and remain bearish as well.
On the derivative front, NIFTY June futures have shed over
4.10 lakh shares or 2.94% in Open Interest whereas July Series have added over
15.81 lakh shares or 62.39% in Open Interest. This indicates rollovers. NIFTY
has reported 23% rollovers, whereas Market wide rollovers have stood at 28%,
both of them a notch below their average.
Going by pattern analysis, the Markets have minor resistance
at 7510-7515 levels and if the Markets do not sustain these levels, some more
weakness is likely to creep in. Otherwise, it is likely to consolidate in a
broad trading range, though with corrective bias.
All and all, given the technicals, reading of lead
indicators and the F&O data, the possibility of corrective action is likely
to continue. Also, at the same time, volatility would continue to remain
ingrained in the Markets. It is advised to continue to remain stock specific
and maintain moderate exposures. Overall, cautious to mildly negative outlook
is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
