MARKET REPORT August
28, 2014
The last hour of the trade turned very volatile as the
Markets swung nearly 60-odd points both ways after a mostly range bound session
and ended the day once again on a modestly positive note. The Markets opened on
a decently positive note but did not show any trend post opening as it
maintained its opening gains for the most part of the session while trade in a
sideways trajectory though it formed its intraday high of 7946.85 in the early
minutes of the trade. It traded sideways after this for the most part of the
session. In the late afternoon trade, the Markets saw a sharp downward movement
as it pared all of its gains and formed its intraday low of 7916.55. It saw
recovery coming in immediately after that and the Markets recovered all of its
losses. It finally managed to end the day at 7936.05, posting a net gain of
31.30 points or 0.40% while forming a higher top and higher bottom on the Daily
Bar Charts.
MARKET TREND FOR THURSDAY, AUGUST 28, 2014
Tomorrow, we enter
the expiry day of the current August Derivative series. The session is
undoubtedly remain dominated with rollover centric activity and quite good
amount of volatility is likely to remain ingrained in it. Further, the trend
formation would continue to pose resistance but maintenance of levels above of
7910-20 range would leave some room for up side for the Markets though it would
be equally dangerous as well.
For tomorrow, the levels of 7965 and 7980 would act as
resistance. The supports would come in at 7910 and 7825 levels.
The RSI—Relative Strength Index on the Daily Chart is
64.9322 and it has reached its highest value in last 14-periods which is
bullish. It does not show any bullish or bearish divergence as such. The Daily
MACD continues to trade above its signal line.
On the derivative front heavy market wide and NIFTY
rollovers continued. NIFTY August futures shed over 16.57 lakh shares or 15.77%
in Open Interest whereas NIFTY September Series added over 42.71 lakh shares or
64.73% in Open Interest.
Going again to the pattern analysis, as mentioned often in
our previous editions, the Markets continue to remain in broad range. There can
be absolutely no doubt that such broad formation can be very early signs of the
Markets topping out. It is evident by the volatility that is ingrained and also
the small body of the trading sessions and narrowing market breadth also
signals towards some exhaustion in the Markets. The Markets will continue to
inch upwards so long as it stays above 7910-20 range but at the same time, very
sharp reversal from any level cannot be ruled out.
Overall, with some immediate steam left, traders / investors
can ride the Markets as it attempts to inch upwards so long as it stays above
7910-20 levels. But each such rise should be extremely cautiously dealt with
as, just as mentioned earlier, sharp reversal from top cannot be ruled out.
While maintaining extreme caution on the upside, controlled and moderate
leverage is advised in the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
