Thursday, February 20, 2014

Daily Market Trend Guide -- Thursday, February 20, 2014

MARKET REPORT                                                                               February 20, 2014
The Markets ended the day with gains on the fourth day in a  row wherein it saw a last hour spurt once again after a capped session to end the day with modest gains. The Markets opened on a mildly positive note and the Markets remained positive for the entire session. However, post modestly positive opening, the Markets remained in a very narrow 15-odd points range. The movement remained capped on improved volumes. However, it was in the last 45-minutes of the trade that the Markets saw a strong and sharp spurt. It went on to move past its 100-DMA levels to touch the day’s high of 6160.35. It maintained gains around those levels and finally ended the day at 6152.75, posting a net gain of 25.65 points or 0.42% while continuing to form a higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The Markets have closed near its 100-DMA levels which is 6149  today and this levels is again likely to pose resistance at Close levels. This is because, following subdued global cues, the Markets are likely to see a negative opening and open below the levels of 100-DMA. However, in the similar breath, the Markets are also likely to show some resilience  to the opening weakness. The intraday trajectory that the Markets form would be important as there are chances that we may see improvement as we go ahead in the session.

For today, the levels of 6160 and 6230 would act as immediate resistance on the Daily Charts. The supports exist at 6105 and 6060 levels on the downside.

The lead indicators continue to show resilience and remain perfectly in place. The RSI—Relative Strength Index on the Daily Chart is 53.4670 and it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, NIFTY February Open Interest has remained unchanged as it has added some 8450 shares or just 0.05% in Open Interest. From this, it becomes fairly clear that the spurt that we saw yesterday has resulted into fresh buying, or if we put it otherwise, it has not seen any sharp short covering either.

Overall, once again returning to pattern analysis, the Markets have resistance at Close at 6149 levels which is the 100-DMA and going further at 6185 which is the 50-DMA. However, if the Markets manage to move past the levels of 100-DMA with good volumes and participation, it should not face much difficulty in inching upwards.

All and all, the Markets would see some subdued opening but at the same time, it is likely to show resilience. It is likely that we may see improvement in the levels as we  go ahead in the session. In case of any downside, the volumes are likely to remain low resulting into limited downside and some consolidation. Shorts should be avoided and any downside should be used to make very selective purchases. Overall, continuance of cautious optimism is advised for today.

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



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