MARKET REPORT February
13, 2014
The Markets inched upwards for the second day in a row but
the session visibly remained dominated with caution and lack of conviction as
the Markets grew cautious ahead of the December IIP and January CPI data that
were slated to come after market hours yesterday. The Markets opened on a
positive note and in the morning trade; gradually inched upwards to form the
day’s high of 6106.60 in the late morning trade. However, the Markets saw some
sluggishness returning and it formed a falling channel thereafter and spent the
entire session in that trajectory. It came off from its day’s high but
maintained modest gains. It finally ended the day at 6084, posting a net gain
of 21.30 points or 0.35% while forming a higher top and higher bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
The December IIP data and the January CPI data that came in
yesterday are more or less in line with the what the Markets expected though
the December IIP contracted little bit more at -0.6% as against expectation of
-0.1%. The Markets have overall discounted this data and no major reaction to
this should be seen. The Markets will open again on a quiet note attempting for
find direction. Absence of volumes and conviction are keeping Markets in this
condition.
For today, the levels of 6110 and 6150 would act as
immediate resistance for the Markets. The supports exist at 6070 and 6045
levels.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 43.3285 and it continues to remain neutral as
it shows no bullish or bearish divergences or any failure swings. The Daily
MACD continues to trade below its signal line but is moving towards a positive crossover.
On the derivative front, NIFTY February futures have shed
over 3.87 lakh shares or 2.44% in Open Interest. This signifies some short
covering in the Markets in yesterday’s session. This is likely to keep the
Markets in the consolidation zone for some more time. It would be very
important to see if this gets replaced with fresh buying.
The Markets have been inching upwards in past couple of
session but the main concern that has remained in this pullback has been the
lack of volumes. The low level participation on the days when the Markets are
rising reflects the lack of directional bias and lack of consensus. Given this
thing, it is likely that the Markets remains in consolidation for some more
time. It has major resistance near 6150 levels in form of a pattern resistance
as well as 100-DMA. To confirm the reversal of the trend, the Markets will have
to move past the levels of 6150 with volumes and conviction.
All and all, while keeping the analysis on the similar
lines, we continue to advice to refrain from creating aggressive positions on
either side. While protection of profits would be extremely important,
purchases may be done very selectively. It is advised to maintain adequate
liquidity until the directional bias is achieved while maintaining a positive
caution on the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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