MARKET REPORT April
28, 2014
The Friday’s session saw the Markets correcting, much on the
expected lines as it opened flat, and then gave up in the second half of the
session to end the day with losses. The Markets opened a flat note and formed
its intraday high of 6869.85 in the very early seconds of the trade. Thereafter
the Markets soon dipped into the negative to trade with modest losses. The
markets moved in the sideways trajectory and moved in the 20-odd points range
with capped losses for almost half of the trading session. The second half of the trading session saw
decline in the Markets as it saw a bout of selling pressure. The Markets
weakened further and lost further ground as it went on to form the day’s low of
6772.85 losing nearly 97-odd points from its day’s high. No recovery was seen
from these levels and the Markets finally ended the day at 6782.75, posting a
net loss of 58.05 points or 0.85% while forming a slightly higher top and
sharply lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The season of “truncated weeks” continue as this week too is
a truncated week with Thursday being a trading holiday again. Today, the
Markets are expected to open on a negative note again and there are strong
chances that the weakness continues and the Markets continue to remain in the
corrective mode. Though the intraday trajectory that the Markets form would be
critical but it is not likely to change the overall bias in the Markets today.
For today the levels of 6810 and 6860 would act as immediate
resistance levels for the Markets. The supports exist much lower at 6720 and
6675 levels.
The lead indicators continue to show signs of weariness in
the Markets. The RSI—Relative Strength Index on the Daily Charts is 61.8476 and
it is neutral as it shows no bullish or bearish divergences or any kind of
failure swings. The Daily MACD is bearish as it trades below its signal line.
On the Candles, a sign of potential weakness is seen. An Engulfing Bearish
Line has occurred. This engulfing bearish pattern is absolutely bearish
which appears during an uptrend. This is a clear case with NIFTY. This
signifies that the momentum in the Markets is weakening. The RSI on the Weekly
Charts too stands overbought.
On the derivative front, NIFTY May futures have shed over
6.81 lakh shares or 4.84% in Open Interest. This very clearly signifies that
there has been offloading / unwinding of long positions in the Markets.
Going by the pattern analysis, the Markets have again formed
a potential top at 6869 levels and there will be no significant up move until
the Markets moves past this level. There would be two distinct scenarios that
either the Markets would continue to correct from these levels OR would again
consolidate in a given trading range as it has been doing. But there will be no
run away rise in the immediate short term and in even of such rise occurring there
would be a big question mark on its sustainability.
All and all, the Markets are most likely to remain in the
corrective mode. The upsides may occur on account of short covering but there
will be no sustainable up move until the Markets moves past the levels of 6869.
We continue to advice to remain moderate on exposure and any such dips, like
that occurred on Friday, should be utilized to make very selective fresh
purchases. Overall, continuance of cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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