MARKET REPORT March
06, 2014
In what seemed to be a corrective session in the first half,
turned out to be a positive one as the Markets reversed in the second half of
the session to continue to end yet another day with decent gains. The Markets
opened on a positive note but soon after positive opening, transformed itself
into a falling channel. It pared all of its gains until later morning trade as
it dipped briefly into negative territory while forming day’s low of 6287.80.
It spent the session trading a very capped range for some time but the second
half of the session saw the Markets giving a robust turn around. The Markets
saw a very sharp up move as it reversed its trade a rose quite sharply and went
on to give the day’s high of 6336.25. It hovered around those levels for a
while and finally ended the day at 6328.65, posting a net gain of 30.70 points
or 0.49% while forming a sharply higher top and higher bottom on the Daily High
Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to see yet another positive
opening and continue with its up move at least in the initial session. However,
as evident from the Chart, the opening is likely around its pattern resistance
in form of double top. The intraday trajectory that the Markets form after
opening would be critically important and the
behaviour of the Markets vis-à-vis the double top resistance would be
equally important.
For today, the levels of 6355 and 6390 would act as immediate
resistance levels. The supports exist at 6275 and 6250 levels.
The RSI—Relative Strength Index on the Daily Chart is
64.6038 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 trades above
its signal line and it continues to remain bullish.
On the derivative front, NIFTY March futures have added over
8.34 lakh shares or 5.74% in Open Interest. This shows that the more longs have
been yesterday, especially in the second half of the session.
Going by the pattern analysis, as mentioned earlier, the
Markets might open near its double top resistance levels and see some
consolidation there. If the Markets resists near those levels, then the
resistance can come in form of either range bound consolidation or mild profit
taking. In any case, the Markets would keep its underlying trend intact.
All and all, the Markets would open on a positive note and
at the same time, might consolidate at higher levels as well. Going by this, it
is advised to continue to protect profits at higher levels. With the underlying
trend remaining intact, shorts should strictly be avoided. Any downside or consolidation
period should be utilized in making fresh purchases. With some chances of mild
correction / consolidation expected at higher levels, cautious approach is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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