MARKET REPORT April
01, 2014
Though the Markets ended the day in the green yesterday, it
saw some weariness for the first time in last couple of sessions. The Markets
opened on a positive note but formed its intraday high of 6730.05 in the early
minutes of the trade. Thereafter, for the entire session it remained in
downward falling trajectory and kept gradually paring it gains. By afternoon
trade it pared all of its opening gains and traded flat. It went on to dip
further in the negative and went on to form the day’s low of 6662.40. However,
the last hour of the trade saw some recovery from lower levels. The Markets
finally ended the day at 6704.20 recovering all of its losses and posting a
nominal gain of 8.30 points or 0.12% while forming a higher top and higher
bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open again on a modestly
positive note and look for directions. However, the trade would remain more or
less on similar lines that of yesterday as the Markets are likely to come off
after positive opening as we go ahead in the session. The signs of imminent
correction appear evident and it would also react to RBI’s credit policy
wherein the March CPI is seen around 8.7%.
Today, the levels of 6730 and 6755 would act as immediate
resistance for the Markets. The Supports exist at 6650a and 6610 levels.
The lead indicators continue to remain in extremely
overbought territory. The RSI—Relative Strength Index on the Daily Chart is
78.8726 and it has reached its highest value in last 14-days. However, it
continues to remain in very “overbought” condition. The Daily MACD remains
bullish as it trades above its signal line and it is about to enter overbought
territory as well.
On the derivative front, NIFTY April futures have added 1.02
lakh shares or 0.61% in Open Interest. This shows no major offloading of
positions seen even when the Markets came off from its opening highs.
Going by pattern analysis, the Markets continue to remain in
extremely overbought condition. In such cases, even if we see continuation of
up move it gets very risky and less sustainable if that happens without any
correction or consolidation and especially with the indicators continuing to
remain in “overbought” condition. Some amount of correction would be healthy
for the Markets.
All and all, the analysis would remain on similar lines that
of yesterday and we can see some paring of gains from higher level again. We
continue to advice to refrain from making blanket purchase and protect profits
at higher levels. Fresh buying should be avoided or should be make extremely
selectively. Cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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