MARKET REPORT March
04, 2014
The Markets snapped its five-day gaining streak as yesterday’
session remained corrective in nature on expected lines as the Markets ended
with losses. The Markets opened on a modestly negative and quiet note traded in
a narrow range with capped losses. The Markets formed its intraday high of
6277.75 in the early minutes of the trade. The entire morning session was spent
by the Markets while trading in a sideward trajectory. However, the second half
of the session saw some more weakness creeping in as the Markets lost ground
gradually and steadily. Towards the end, it went on to form the day’s low of 6212.25.
The Markets saw a very minor recovery from the lows of the day and finally closed
at 3221.45, posting a net loss of 55.50 points or 0.88% while forming a
slightly lower top and lower bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
Today, the Markets are likely to open on a modestly positive
note and would look for directions. The weakness that we saw yesterday would
now see itself getting replaced with some mild recovery in the Markets. While
intraday trajectory would continue to remain important, we are likely to see
some respite from the weakness that we saw yesterday. The Markets might trade
in a range today with the levels of 100 and 50-DMA acting as major supports.
For today, the levels of 6280 and 6335 are immediate
resistance on the Daily Charts. The supports exist at 6185 and 6170 levels at
Close.
The lead indicators continue to remain in place. The RSI—Relative
Strength Index on the Daily Chart is 56.7830 and it is neutral as it shows no
bullish or bearish divergences or any failure swings. The Daily MACD continues
to remain bullish as it trades above it signal line.
On the derivative front, the NIFTY March futures saw
shedding of Open Interest by over 2.52 lakh shares or 1.84%. This signifies
some profit taking from higher levels in the second half of the session.
Going by the pattern analysis, the Markets have just
corrected after five days of gains. Though it corrected yesterday, it has shown
no structural breach on the Charts and it still continues to trade above all of
its Daily Moving Averages. Having said this, in event of any weakness, it would
be important for the Markets to keep trading above its 50-DMA and 100-DMA at
Close levels and these two levels should continue to act as supports. So long
as the Markets continue to trade above these levels, any weakness would be just
consolidation before continuation of the up move.
All and all, today, we would see a modest opening and the
Markets should see minor gains in the opening trade. With no structural breach
on the Daily Charts, the shorts should be strictly avoided. Any downside should
be utilized in making selective purchases. Overall, though the quantum of the
exposure in the Markets should be
controlled, cautiously positive outlook
is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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