MARKET REPORT April
07, 2014
The Markets expectedly remained in the corrective mode on
Friday as it opened negative, remained negative through the entire session and
ended the day with modest losses. The Markets opened on a modestly negative
note and expected the levels of 6776 continued to act as immediate top. After opening
negative, the Markets traded in 20-odd points range until afternoon, after
which it gradually kept losing ground. In the late afternoon trade, it touched
the levels of 6685.15 to form the intraday low of the day. It hovered around
those levels, never made any visible attempt to recover and finally ended the
day at 6694.35, posting a loss of 41.75 points or 0.62% while forming a lower
top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets have visibly entered into corrective mode and today,
it is expected to open on a flat and quiet note and look for directions.
However, it is likely to remain under corrective mode and we can see some
continuation of profit taking however at the same time, some sectoral out
performance would also be seen. We have
a truncated week this time as tomorrow is a trading holiday.
For today, the levels of 6740 and 6776 would act as immediate
resistance levels for the Markets. The supports exits lower at 6650 and 6610
levels.
The lead indicators continue to show the sign of some
weariness in the Markets. The RSI—Relative Strength Index on the Daily Chart is
70.3672 and it still continues to remain in “overbought” territory. However, it
is neutral as it shows no failure swings or any bullish or bearish divergences.
The Daily MACD continues to trade above its signal line.
On the derivative front, the NIFTY April series have shed over
7.99 lakh shares or 4.66% in Open Interest. This is a very clear indication
that there has been clear offloading of positions that has been seen in the
Friday’s session.
Going by the pattern analysis, the levels of 6776 has now
became a certain immediate top. The Markets would see an up move only after it
moves past this level. However, for such up move to remain sustainable and
healthy, it will have to either consolidate for some more time or show some
profit taking from current levels.
All and all, the Markets would open flat and even if it
trades positive in the initial session, some chances of profit taking from
higher levels is certainly not ruled out. Sectoral out performance from the IT
and Pharma stocks can be seen but the overall Markets is very much likely to
remain in the corrective mode. It is important to make new purchases very
selective and continue to protect profits at higher levels. While remaining
light on the over all exposure levels, continuance of cautious outlook is
advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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