MARKET REPORT June
27, 2014
The June series ended on a bearish note, much on the
expected line as the Markets opened weak, weakened further towards the end and
closed with losses. The Markets opened on a flat and quiet note but on the
mildly negative side and formed its intraday high of 7570.20 in the very early
minutes of the trade. The Markets thereafter further pared its gains and traded
with modest losses. It continued to maintain those losses and the Markets
thereafter spent much of the session in sideways manner while making no major
attempts to recover. In the last hour and half of the trade, the Markets
slipped further and widened its losses while making its intraday low of 7481.90
slipping nearly 90+ points from its day’s high. Again, with no major attempt to
recover, it finally ended the day at 7493.20, posting a net loss of 76.05
points or 1% while forming a lower top and sharply lower bottom on the Daily
High Low Charts.
MARKET TREND FOR TODAY
Today, the Markets faces a critical test as the behaviour of
the Markets vis-à-vis the levels of 7510 would be critical. The Markets are
again expected to open on a flat to mildly positive note but if it fails to
move past the 7510 levels, there are chances that the some more weakness in the
Markets creeps in. If it sustains above 7510, the consolidation would continue
in the Markets.
Today, the levels of 7510 and 7575 would act as resistance
and the levels of 7440 and 7410 would act as immediate supports.
The lead indicators do not paint a pretty picture. The RSI—Relative
Strength Index on the Daily Chart is 54.9443 and it has reached its lowest
value in last 14-days which is bearish. It does not show any bullish or bearish
divergence. The Daily MACD continues to remain bearish as it trades below its
signal line.
On the derivative front, the NIFTY July futures have added
over 32.97 lakh shares or 30.20% in Open Interest. Apart from some long
unwinding that has happened yesterday some amounts of fresh shorts too have
been observed, though with lower quantities.
Going by the pattern analysis, the Markets have again done a
miner breach of the short term support line at 7510 levels. We shall continue
with consolidation if the Markets manages to trade above this level but if it
breaches below this, we can expect some more weakness to creep into the
Markets.
All and all, for the Markets to avoid further weakness from
creeping in, it would be necessary for it to trade above 7510 levels. However,
there are chances that the Markets, even if it opens on a positive note, resist
around these levels. It is advised to stay away from high beta stocks, and
purchases, if any should be curtailed to defensives only. Overall, continuance
of neutral to cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
