Tuesday, January 14, 2014

Daily Market Trend Guide -- Tuesday, January 14, 2014

MARKET REPORT                                                                                        January 14, 2014
The Markets saw a hefty surge backed by banking and IT among other oil and gas stocks as it opened higher, became stronger in the last hour of trade and ended the day with hefty gains supported by heavy FII buying. The Markets opened on a stronger than expected note and spent the most part of the session maintaining those gains and trading comfortably above the 50-DMA. The Markets grew even stronger in the last hour of the trade as it went on to give the day’s high of 6288.20. Markets sustained these gains as well and finally ended the day at 6272.75, posting a robust and hefty gain of 101.30 points or 1.64% while forming a distinctly higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, we might again see a subdued opening today as the Markets are expected to open on a flat to mildly quiet note and look for directions again. The Markets have given buoyant indicators after yesterday’s rise and after some consolidation again, the overall undercurrent still remains distinctly bullish.

For today, the levels of 6310 and 6345 are immediate resistance on the Daily Charts. The support exist at 6192, which is the 50-DMA at Close levels.

The RSI—Relative Strength Index on the Daily Chart is 56.2132 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD, though it still continues to trade below is signal line might attempt positive crossover in coming days. 

On the derivative front, the NIFTY January futures have added over 5.28 lakh shares or 3.10% in Open Interest. This is certainly positive as we can clearly interpret that the rise that we saw yesterday is not just on account of short covering. Fresh longs have been seen added across NIFTY and stock futures.

Overall, the Markets have attempted a breakout and after attempting support at its 50-DMA for couple of times in last fortnight. The Markets have managed to successfully hold on to that support and has attempted a reversal  with the yesterday’s up move. Even if the Markets consolidates at these levels, it is certainly likely to keep its head above the critical supports and prepare for further continuation of the up move in coming sessions.

The Markets will give reactions to WPI and CPI inflation data coming tomorrow, which is expected to be better and lower. Overall, given the structure on the Daily Charts, the Markets may again see brief consolidation with a positive bias. In even of some range bound movement, selective purchases may be continued to be made. Overall, positive outlook is advised for today.

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


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