MARKET REPORT February
18, 2014
The Markets spent a range bound session yesterday but
remained volatile amid that range while reacting to the interim budget
presented by the FM yesterday. The Markets opened on a modestly positive note
and traded in a capped range in the morning trade. It saw a sharp dip while it
reacted to the interim budget. It dipped into the negative for a brief period
giving intraday low of 6038.30. However, it soon recovered to trade back in the
positive territory. After trading once again in a capped and narrow range, it
inched upwards towards the end of the session while giving intraday high of
6080.65. The Markets finally ended the day at 6073.30, posting a net gain of
24.95 points or 0.41% while forming a higher top and higher bottom on the Daily
High Low charts.
MARKET TREND FOR TODAY
Today, the Markets are likely to open yet again on a quiet
note and would continue to look for directions. The Markets have continued to
remain in broad range and would continue to do so with the levels of 6100 and 6145 acting as
the upper band and the resistance within the given range. Both, the volumes and
the intraday trajectory would continue to remain important while giving
sustainable directional bias to the Markets.
For today, the levels of 6100 and 6145 would act as
important resistance levels for the Markets. The 200-DMA level of 5981 would
continue to act as key support on the Close Charts.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 44.9961 and it has reached its highest
value in last 14-days which is bullish. The RSI has formed a new 14-day value
while NIFTY has not yet and this is Bullish Divergence. The Daily MACD, as we
have been mentioning in our previous editions of Daily Market Trend Guide has
reported as positive crossover and is now bullish as it trades above its signal
line.
On the derivative front, NIFTY February futures have added 48,550
shares or 0.30% in Open Interest This shows that there has been no short
covering or any offloading of positions
yesterday. It would be important to see if fresh longs get added today.
Going by the pattern analysis, the Markets have taken
support on its 200-DMA for multiple times and it now continues to trade in a
broad range with the levels of 6100-6150 (100-DMA) acting as the upper band of
the trading range. The previous pullback from the 200-DMA did not sustain as
there was total lack of participation and volumes. With the Markets now attempting
to pullback again, the volumes would play important role in lending sustainable
directional bias to the Markets.
All and all, today, we would see quiet opening and the
Markets would continue to trade in a range. Any up move that the Markets see
would need to be supported by volumes. Trend reversal would be conformed only
after the Markets move past the levels of 6150 levels. Until this happens, the
Markets would continue to remain in trading range. We continue to advise to
adopt defensive approach with controlled exposure and vigilant protection of
profits while maintaining a overall positive bias for the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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