Thursday, November 14, 2013

Daily Market Trend Guide -- Thursday, November 14, 2013

MARKET REPORT                                                                                   November 14, 2013
The Markets yesterday tested its 50-DMA, very much on expected lines as it continued to correct and end the day with losses for the 7th session in a row. The Markets opened on a modestly negative note but did not drift much lower as it continued to trade in a capped range in the first half of the session. The Markets traded with capped losses and in the afternoon trade managed to inch into the positive territory to mark the day’s high of 6042.25. The Markets saw a fresh wave of correction coming in the second half of the session as Markets pared all of its gains in the second half of the session. It went on to touch its 50-DMA as it gave its day’s low of 5972.45. After hovering in a capped range after that, it finally ended the day at 5989.60, posting a net loss of 28.45 points of 0.47% while forming a lower top and lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we are likely to see some respite from the downtrend that we have been witnessing since last 7 sessions. The Markets are likely to open on higher and positive note and look for directions. The key would be to see if the Markets are able to sustain the opening gains and maintains itself above the important support levels of 50-DMA.

For today, the levels of 6040 and 6065 would act as immediate resistance levels for the markets. The supports exist at 50-DMA further down at 5950 levels.

The RSI—Relative Strength Index on the Daily Chart is 40.4973 and it has reached its lowest levels in 14-days which is bearish. However, 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 November futures has went on to shed yet another 6.30 lakh shares or 3.22% in open interest. This signifies that the profit taking resumed yesterday after taking a brief break a day before.

Going by the above reading, it is clear that though the Markets are strongly attempting to find a  bottom for themselves, it is not completely out of the woods as yet. Today though we are set to see a positive opening, it would be very critically important to see that the Markets maintains the levels above of its 50-DMA which is 5984. Any breach below this levels again would see more weakness creeping into the Markets.

Overall, we can certainly expect a modestly positive start but one has to keep in mind that the Markets have attempted to find a bottom but there is no confirmation as yet. So, even with positive opening, it is advised not to make excessive purchases and continue with policy of preservation of liquidity and open positions. The intraday trajectory and sustenance of levels above of 50-DMA would be critically important for the Markets today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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