MARKET REPORT January
08, 2014
The Markets continued to correct yesterday and ended in red
for the fifth day in a row as it slipped below its 50-DMA on low volumes and
ended the day with modest losses. The Markets opened on a modestly positive
note and formed its intraday high of 6221.50 in the early minutes of the trade.
After trading positive for a brief period and in capped range the Markets gave
up and slipped into the red in late morning trade. It continued to trade
negative in a capped range. It made a brief attempt to recover in the late
afternoon trade but gave up again towards close and finally ended the day at
6162.25, posting a net loss of 29.20 points or 0.47% while forming a similar
top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, we can expect some respite from the weakness that we
have been seeing since last couple of days. The Markets are expected to open on
a modestly positive note and look for directions. The behaviour of the Markets vis-à-vis
the levels of 50-DMA would remain crucial and intraday trajectory, therefore,
would continue to remain critically important. The global markets trade stable
this morning.
For today, the levels of 6195 and 6240 would act as immediate
resistance for the Markets. The supports exist at 6130 and 6105 levels on the
downside.
The RSI—Relative Strength Index on the Daily Charts is
44.0995 and it has reached its lowest value in last 14-periods which is
bearish. However, it does not show any bullish or bearish divergence on the
Charts. The Daily MACD continues to trade below its signal line.
On the derivative front, the NIFTY January futures has
remained practically unchanged as it has shed just 48,750 shares or nominal
0.27% in Open Interest. We can fairly conclude that there has been no major
shedding of long positions in the Markets with the yesterday’s decline.
The Markets have ended the day below their 50-DMA but is
still well within its filter levels. The Markets would see a modestly positive
opening today but it would be very critically important for it to see that it
maintains those opening gains. The levels of 50-DMA, 6194, would continue to
pose mild resistance on the upside.
Overall, with the Markets expected to open positive and with
global markets in supportive mode, we may again see the Markets testing the
levels of 50-DMA. It would be important for the Markets to move past the levels
of 6195 and trade above that. It is advised to remain ultra selective while taking
new positions and maintain adequate liquidity to protect open positions.
Overall, continuance of positive caution is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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