MARKET REPORT July
09, 2014
The Railway Budget failed to cheer the Markets as the
Markets reacted very negatively to it and ended the day with large losses. The
Markets as such needed a reason to correct and it found it in Railway Budget
which was seen as more on intentions and less on actions. The Markets opened on
a mildly positive note and formed its day’s high of 7808.85 in the early
minutes of the trade. After remaining in green for a short while the Markets
drifted into the red. It moved in sideways trajectory while the Budget was
being presented and in the second half saw a huge wave of selling pressure
coming in. The drifted further and went on to lose over 200-odd points from the
high point of the day and went on to form the day’s low of 7595.90. It saw a
very minor recovery at Close and ended the day at 7623.20, posting a big loss
of 163.95 points or 2.11% while forming a slightly higher top but sharply lower
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, the Markets are likely to see a subdued opening and
remain weak in the initial trade and we may see some more pain today. The
Markets have breached its important levels of 7700 and in event of a technical
pullback, this level of 7700 will act as resistance. After yesterday’s session
the Markets have failed to report a breakout while moving past the levels of
7700. The intraday trajectory and volumes will pay a important role. The
volatility shall definitely persist as the Markets shall also react to Economic
Survey which would be released later today.
For today, the levels of 7700 would continue to act as
resistance. The supports com in at 7590 and 7510 levels.
The RSI—Relative Strength Index on the Daily Chart is 55.70
and it remains neutral with no bearish or bullish divergences or any failure
swings. The Daily MACD reported a negative crossover again and it now trades
below its signal line.
On the derivative front, the NIFTY July future have shed
over 6.43 lakh shares in Open Interest and this clearly shows that there has
been unwinding of long positions yesterday.
Going by the pattern analysis, the Markets have failed to
achieve a breakout after it attempted to move past the levels of 7700. Now
since the Markets have drifted below this level, this level shall act as
immediate resistance for the Markets.
Overall, as mentioned earlier, the Markets shall also react
to the Economic Survey today and also more to Union Budget coming up yesterday.
We may see more weakness coming in if the Union Budget is also viewed more in
intentions and less in actions tomorrow. There are all chances of it remaining
a non-event for the Markets. Given this scenario, and given that the Markets
were anyway due for correction, we advice to stay away from making fresh purchases
and continue to maintain liquidity. Cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
