MARKET REPORT August
19, 2014
The Markets saw a secular up move yesterday and touched its
new lifetime highs as it ended the fourth day in a row on a decently positive
note. The Markets opened on a flat and quiet note and briefly dipped into the
red in the very early minutes of the trade to form the day’s low of 7779.20.
However, it crawled back into the green in a short time and for the rest of the
session saw a very steady and secular up move. The Markets transformed itself
into rising trajectory and kept inching upwards for the rest of the session. It
rose some 100-odd points from the low point of the day and towards the end,
went on to form the day’s high of 7880.50. These levels were maintained by the
Markets and it finally ended the day at 7874.25, posting a decent gain of 82.55
points or 1.06% while forming a higher top and higher bottom on the Bar Charts.
MARKET TREND FOR TODAY
Technically speaking, since the Markets have ended at the
high point of the day, they are set to open again on a positive note and trade
with gains at least in the initial trade. The external factors continue to aid
to this sentiment and we can see a positive opening with the Markets trading
with modest gains. However, with each
rise now the Markets are showing increasing probability of some impending
consolidation in the immediate short term.
Though the Markets would open and trade in uncharted
territory, the possible resistance levels could be 7905 and 7930. The supports
exist at 7815 and 7770 levels.
The RSI—Relative Strength Index on the Daily Chart is
62.5121 and it has reached its highest value in last 14-days which is bullish.
It does not show any bullish or bearish divergence. The Daily MACD has reported
a positive crossover and it now trades above its signal line.
On the derivative front, the NIFTY August futures have added
over 6.41 lakh shares or 4.45% in Open Interest. This reading is generally
bullish but the NIFTY PCR now stands at 1.07 from 0.97 yesterday.
Going by the pattern analysis, as mentioned in our yesterday’s
edition of Daily Market Trend Guide, the Markets have attempted to breakout
from a ascending triangle while still continuing to remain within the overall
broad formation that we have been mentioning in our previous couple of
editions. Though the Markets continue to rise, it would still continue to
remain in overall broadening formation and therefore we can very firmly say
that these advances are creating distribution in the immediate short term.
Given the above reading, we would continue to advise traders
/ investors to remain extremely vigilant at higher levels and protect profits.
Fresh purchases may be made but on very selective basis and with trailed stop
losses. At any given point of time, the possibility of a consolidation of
profit taking from higher levels cannot be ruled out. Positive caution is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
