MARKET REPORT January
30, 2014
Rollovers and tapering fears played spoilsport with the
Markets yesterday as they reduced the strong opening to just a flat closing in what was seen as a buoyant
session initially. The Markets opened on a decently positive note, somewhat
better than what was expected and formed its intraday high of 6170.45 in the
early minutes of the trade. The Markets spent the most part of the session
thereafter in a narrow and slightly sloping channel with a little downward
bias. Lead by rollovers and fear of US tapering the Markets lost ground sharply
in the last hour of the trade. It pared all of its gains, dipped in the
negative to give day’s low of 6109.80. It recovered a bit from those levels and
finally ended the day at 6120.25, posting a negligible loss of 6 points or
0.10% while forming a slightly higher top and higher bottom on the Daily High
Low Charts.
MARKET TREND FOR TODAY
Today’s session is
likely to be like a acid-test for the Markets. The Markets have taken support
at its 100-DMA at Close levels. However, US tapering of $10 billion will take
its toll on opening and the Markets are set to open lower. The key point is to
see if the y recover later in the day today or tomorrow as any expected gap
down opening with make the markets “oversold”.
For today, the levels of 6170 would act as resistance while supports
exist at 6120 levels at Close levels and at 6030 levels intraday.
The RSI—Relative Strength Index on the Daily Chart is
38.8366 and it has reached its lowest value in last 14-days which is bearish.
It does not show any bullish or bearish divergences as such. The Daily MACD
remains bearish as it continues to trade below its signal line.
On the derivative front, it has been seeing a lots of shorts
being rolled over. The market wide rollovers have stood at 59% as against 53%
and the NIFTY rollovers have been seen at a high of 65% as against 54%. The
NIFTY January futures have been trading in a discount and the discount widened
yesterday showing that a huge amount of shorts are existing in the system.
Having said this, today’s session is set to be a difficult
one for the Markets. On one hand, it is all set and likely to breach the key
support of 100-DMA and at the same time, if sees a deeper cut, it would
immediately get “oversold”. It would be critically important to see if the
Markets recover in the second half of in new series beginning tomorrow.
From what is seen from the pattern analysis and the key
F&O data, the Markets will not see a serious breach beyond today’s gap down
opening. It is strongly advised to cover profits in any existing short
positions. However, it is also advised to avoid any aggressive buying as well.
Fresh shorts should not be make as it can lead to short trap in coming days.
While remaining light on positions, maintaining liquidity for existing
positions with cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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