MARKET REPORT March
21, 2014
The Markets saw a session on consolidation yesterday wherein
it opened lower, remained negative throughout the session and ended the day
with modest losses. The Markets opened on a negative note following mildly weak
technical cues and traded with capped losses in the morning trade. In the
second half of the session, the Markets after making a feeble attempt to
recover, saw some more weakness creeping in as it drifted lower. It continued to
show gradual slide on lower volumes and in the last minutes of the trade, went
on to form the day’s low of 6473.25. The Markets hovered around those levels a
bit and finally ended the day at 6483.10, posting a net loss of 40.95 points or
0.63% while forming a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a modestly positive
note and look for directions, however, broadly speaking, the consolidation is
expected to continue. The Markets are expected to trade positive in opening
trade and the intraday trajectory continues to remain critically important
along with volumes to decide the trend for today. The Markets continues to
trade in a broad trading range with the
levels of 6574 acting as its immediate top.
For today, the levels of 6525 and 6575 would act as its
immediate resistance and the supports exist at 6455 and 6415 levels.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 65.0513 and has moved out of an oversold
area. It remains neutral as it shows no bullish or bearish divergences or any
kind of failure swings. The Daily MACD continues to remain bullish as it trades
above its signal line. It is moving towards reporting a bearish crossover and
if this happens, we might see some longer consolidation periods for the
Markets. However, as of now, this has not happened.
On the derivative front, NIFTY March futures have shed over
6.64 lakh shares or 3.33% in Open Interest. This shows some first signs of
weariness in the Markets at lower levels and also signifies some shedding of
long positions from higher levels.
Going by the pattern analysis, the Markets broke out on the
up side from 6415 levels while forming its lifetime highs near 6574. Post this,
the Markets have been consolidating in side ward trajectory and currently it
continues to trade well above its lower range of the trading range and has
shown no technical breach on the Daily Charts.
All and all, the Markets are slated to open modestly
positive, but are continue to trade in a range while continuing to remain in
the consolidation zone. It continues to trade above its all critical support
levels and therefore, in event of any downside that is seen, this should be
utilized to make selective purchases. The profits on existing positions needs
to be guarded vigilantly and shorts should be strictly avoided. While
maintaining stock specific approach, cautious optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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