MARKET REPORT March
26, 2014
The Markets had a volatile and range bound consolidation
session yesterday wherein it moved in either direction of its previous Close
and finally ended the day with minor gains. The Markets opened on a negative
note and soon formed its intraday low of 6544.85 in the very early minutes of
the trade. Thereafter, the Markets soon recovered to trade flat. The Markets
spent the first half of the session in a narrow range with capped losses paring
grounds and recovering it again. The second half of the session saw a sharp
movement as the Markets spurted on the upside only to see paring of those
gains. The last hour of the trade once again saw strength in the Markets as the
Markets went back in the positive territory to form the day’s high of 6595.55.
It finally ended the day at 6589.75, posting a minor gain of 6.25 points or
0.09% forming a slightly higher top and higher bottom on the Daily High Low
Charts.
MARKET TREND FOR TO DAY
Even with the Markets remaining in “overbought” territory,
it saw positive consolidation yesterday without showing much weakness even at
higher levels. Today, expect the Markets
to open on a positive note and continue with its up move in the initial
trade. However, the second half of the
session is likely to see some consolidation or mild profit taking from higher
levels. We enter the penultimate day of expiry of current series and the
session is also likely to remain dominated with rollover centric activities.
Today, the levels of 6595 and 6630 would act as immediate
resistance for the Markets. The supports exist at 6550 and 6510 levels.
The lead indicators continue to remain in “overbought”
territory. The RSI—Relative Strength Index on the Daily Chart is 72.5163 and it
does not show any failures wings. However, it trades in the overbought
territory and the NIFTY has formed a new 14-period high but RSI has not. This
is Bearish Divergence as well. The Daily MACD continues to trade above its
signal line.
As evident from the Daily Charts, the Markets have not
completely broken out on the upside but it has certainly attempted to move out
of the trading band of 6415-6575 levels. However, though there is a distinct
possibility of a breakout on the Daily Charts, the Markets would not see a run-away rise as the
lead indicators remain overbought. This would either make the Markets remain in
consolidation for some more time or make the further up move little less
sustainable and risky.
All and all, the Markets would see a positive opening but at
the same time it is likely to remain ingrained with volatility due to rollovers.
Further, there are also chances that the Markets would see some consolidation
or mild profit taking at higher levels. Given this reading, it is strongly
advised that more emphasis should be given to protection of profits at higher
levels rather than making new purchases. Also, any dip from higher levels
should be utilized to make fresh purchases while strictly avoiding shorts. Overall,
neutral outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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