MARKET REPORT September
18, 2014
Buoyed by the FOMC outcome wherein it indicated that the
interest rates would be kept at current levels for “considerable time” and with
China pledging funds today, the Markets took this as a sentiment booster and saw
a very strong pullback after two days of losses. The Markets opened expectedly
on a lower note and formed its intraday low of 7939.70 in very early minutes of
the trade. In the morning trade, the Markets saw itself slowly recovering from
lower levels. However, beginning the late morning trade and rest of the session
after that the Markets saw a sharp up move and kept adding gains. The Markets remained
very buoyant and saw no signs of any kind of selling pressure at higher levels.
It rose some nearly 175+ points from lows of the day as it went on to form the
day’s high of 8120.85. This level was maintained and the Markets finally ended
the day at 8114.76, posting a robust gain of 139.25 points or 1.75% while forming
a sharply higher top and bottom on the Daily Bar Charts.
MARKET TREND FOR FRIDAY, SEPTEMBER 19, 2014
After a strong pullback, the Markets have left itself at a
very critical juncture as evident from the Daily Charts. Tomorrow’s opening,
and the behaviour of the Markets vis-à-vis the range of 8125-8150 would be
crucial to see if the Markets attempt to breakout again or remain in
consolidation mode. The opening is expected to be modestly positive but the
overall trading trajectory of the Markets will remain very important and face an
acid test.
The levels of 8140 and 8180 would act as immediate
resistance and the supports come in much lower at 7930 and 7870 levels.
The RSI—Relative Strength Index on the Daily Chart is
60.8258 and it is neutral as it shows no bullish or bearish divergence or
failure swings. The Daily MACD still continues to remain bearish as it trades
below its signal line.
On the derivative front, NIFTY September futures did see
some fresh long positions as it added over 9.53 lakh shares or 7.54% in Open
Interest.
Looking at the structure of the charts, as mentioned
earlier, the Markets have still ended within the range seen on the Charts. Its
opening and behaviour vis-à-vis the levels of 8120-8150 would be critically
important. In order to breakout again, the Markets will have to trade above
these levels. Failure to do so will bring the Markets once again in the
consolidation zone.
Overall, with some initial positive movement expected,
selective purchases can be made. Sectoral and stock specific out performance
would also be seen. However, there are chances of some profit taking returning
at higher levels and therefore, positions and profits should be protected at
higher levels. Overall cautious optimism is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
