MARKET REPORT January
17, 2014
The Markets had a severe consolidation yesterday as it
remained in very tight range and ended the day on a flat note after moving in
either direction. The Markets opened on a modestly positive note and formed its
intraday high of 6346.50 in the early minutes of the trade. After hovering
around those levels, the Markets slipped and soon pared all of its gains to
trade flat. After some sideward movement, the Markets slipped further to give
the day’s low of 6299.85 in the afternoon trade. However, from there the
Markets did attempt a recovery. It managed to recover all of its losses and
trade briefly in the positive. No significant directional bias was witnessed as
the Markets spent the rest of the session not moving in specific direction. It
finally ended the day at 6318.90, posting a minimal loss of 2 points or 0.03%
while forming a higher top and higher bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, we are again likely to see a quiet opening in the
Markets. The Markets have attempted a breakout and to give a sustainable
upside, it will have to move past its minor double top formation of 6350 as we
had mentioned yesterday. The intraday trajectory would be important after
opening today and for any up side to sustain, the Markets will also have to see
volumes coming in.
For today, the levels of 6350 and 6395 are immediate
resistance levels on the Daily Charts. The supports exist at 6290 and 6255
levels.
The RSI—Relative Strength Index on the Daily Chart is
59.3719 and it continues to remain neutral as it shows no bullish or bearish
divergence or any failure swings. The Daly MACD
too continues to remain bullish as it trades above its signal line.
On the derivative front, the NIFTY January futures has added
over 8.21 lakh shares or 4.51% in Open Interest and this very clearly shows
that there has been lot of addition of short positions in the Markets. In the
last session, we have seen overall premiums
contracting as compared to the spot price and this clearly signifies creation
of short positions in the system.
Overall, the structure on the Daily Charts remains stable.
Going by the pattern analysis, the Markets would encounter resistance near its
minor double top formation of 6350. For any up move or a fresh breakout the
Markets will have move past those levels with conviction and volumes. However,
given the F&O data, the formation is much supportive for a up side breakout and the bias certainly
continues to remain on the upside baring a consolidation of a day or two.
All and all, in the above narrated readings, it is advised
to remain light on positions until a directional bias is confirmed. However,
given the pattern analysis and the F&O data, shorts should strictly be
avoided and any downside should be used for making very selective purchases.
Overall, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
