Monday, March 10, 2014

Daily Market Trend Guide -- Monday, March 10, 2014

MARKET REPORT                                                                                         March 10, 2014
The Markets had a huge surge in the Friday’s session as it moved past its lifetime highs on intraday levels as well and ended the day on a new life time high moving past all resistances as well. The Markets opened on a positive note on Friday and spent the session in a one-way up move in form of rising trajectory. After opening on a positive note, the Markets surged to move past its previous lifetime high of 6415 levels. It continued to gain strength and it kept making fresh intraday highs steadily during the session. It went on to post the day’s high of 6537.80 during the end of the session. It maintained those levels and finally ended the day at 6526.65, posting a very strong gain of 125.50 points or 1.96% while posting a sharply higher top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

As mentioned in our Friday’s edition of Daily Market Trend Guide, there has been a huge breakout on the Daily Charts but at the same time, the Markets have now moved into very “overbought” territory. Today, expect the Markets to open on a quiet to modestly negative note and look for directions. There are very bright chances that the Markets corrects a  bit, or at least consolidates with the levels of 6537 acting as its immediate top, given the fact that the Markets have seen nearly 350-odd points rise and is now trading “overbought”.

Today, the levels of 6537 would act as immediate resistance for the Markets. Supports exist at 6475 and 6440 levels.

The lead indicators show some signs of weariness in the Markets. The RSI—Relative Strength Index on the Daily Chart is 74.6769 and it now trades in “overbought” territory. However, 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 is bullish as it trades above its signal line. 

On the derivative front, the NIFTY March futures have added over 23.04 lakh shares or massive 14.58% in Open Interest and this shows heavy buying was done in Friday’s session in the F&O space. Also heavy delivery based buying was seen in Cash segment as well.

Going by the Pattern Analysis, the Markets have achieved a fresh breakout on the Daily Charts and has given a fresh buy signal but at the same time, it has now entered the “overbought” territory. This means that while keeping the original trend intact, there are bright chances that we see some consolidation or mild correction from higher levels.

All and all, there are bright chances that we see some profit taking or mild correction from higher levels with the Markets slated to open modestly lower. However, it is very important to note that the way we advice against blind and reckless buying, shorts too should be very strictly avoided because the original trend remains intact. Profits should be protected at higher levels very vigilantly and any downside / consolidation should be used to make selective purchases. Overall, controlled and selective exposure in the Markets is advised for today.

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


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