Friday, February 14, 2014

Daily Market Trend Guide -- Friday, February 14, 2014

MARKET REPORT                                                                                      February 14, 2014
The Markets had a thoroughly disappointing session yesterday as it ended the day with a significant cut following total lack of volumes and buying support. The Markets opened on a modestly positive note and initially it seemed that we will have a resilient session which would resist weak global cues. However, the Markets formed its intraday high of 6094.40 in the early morning trade and soon dipped into the red. The Markets thereafter formed a downward falling trajectory and remained so for the rest of the session while steadily forming fresh intraday lows. The Markets touched its final intraday low of 5991.10 in the final minutes of the trade. It saw a very minor recovery and managed to end the day at 6001.10, posting a net loss of 82.90 points or 1.36% while forming a lower top and sharply lower bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The biggest solace in yesterday’s session what that the volumes across the board has remained lower than average. Taking this into account, and from relatively favourable global cues, we are expected to see a positive opening today. The Markets are expected to open on a positive note and decently hold on to its 200-DMA support. A technical pullback is likely today.

For today, the levels of 6050 and 6115 are immediate resistance on the Daily Chart. The support exists at 5980 at Close levels.

The lead indicators show resilience to the weakness and this is little positive. The RSI—Relative Strength Index on the Daily Chart is 35.8270 and it is neutral as it does not show any bullish or bearish divergence or any failure swing. The Daily MACD, though it continues to remain bearish as it trades below its signal line, is very much likely to report a positive crossover if the Markets do not breach any major supports. 

On the derivative front, the NIFTY February futures have added over 11.30 lakh shares or massive  7.25% in Open Interest. This signifies that there has been addition of big shorts into the system.

Going by the pattern analysis, the Markets have not breached its major support of 200-DMA at close. Even if it pares all of its opening gains and dips below this level, this level is likely to continue to act as major support at Close. Further, given the shorts positions that exist in the Markets, there are high chances that the Markets finds supports at these levels.
 
All and all, we are likely to see respite from the weakness that we saw yesterday. There has been no structural breach on the Charts and given the pattern analysis and the F&O data, there are high chances of the Markets taking support at these levels again. It is strongly advised to maintain adequate liquidity and remain light on the positions while maintaining a positive outlook for today.

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



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