MARKET REPORT April
09, 2014
Consolidation continued in the Markets as the Markets opened
positive on Monday, declined and traded with losses and recovered from its lows
to end the day absolutely flat. Yesterday was a trading holiday on account of
Ramnavmi. The Markets opened positive on Monday and formed its intraday high of
6725.15 in the early minutes of the trade. Thereafter, the Markets soon
gradually declined and dipped into the negative. In the afternoon trade, the
Markets went on to form its day’s low of 6650 as well. However, the last hour
and half of the trade saw the Markets recovering from its intraday lows. The Markets
manage to recoup most of its day’s losses and almost traded near its previous
day’s close by the end of the session. It finally managed to end the day at
6695.05, posting a nominal gain of 0.70 points or 0.01% while continuing to
form a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets shall open today after a gap as yesterday was a
trading holiday. The Markets are expected to open on a flat to mildly positive
note and look for directions. Even if some amount of positive trading is seen,
it is very much likely that the Markets continue to remain in the consolidation
mode and trades in a range with some amount of volatility ingrained in it.
For today, the levels of 6720 and 6776 would act as
immediate resistance levels for the Markets. The supports would exist at 6650
and 6610 levels.
The lead indicators continue to remain overbought. The RSI—Relative
Strength Index on the Daily Chart is 70.4193 and it is neutral as it shows no
bullish or bearish divergences or any failure swings. However, it still
continues to trade in the overbought territory. The Daily MACD has reported a
negative crossover and it now trades below its signal line and it is bearish.
On the derivative front, the NIFTY April futures have added
over 3.63 lakhs shares or 2.22% in Open Interest. This signifies that some amount of shorts were
covered form the lower levels on Monday and that has also resulted into
addition of fresh longs. However, it needs to be seen if fresh profit taking
begins.
Going by the pattern analysis, the Markets have now
confirmed the levels of 6776.75 as its immediate top. The Markets will either
see profit taking from these levels or at least consolidate with the levels of
6776 acting as the immediate top for the Markets. Going by the lead indicators
and pattern analysis, it seem very much likely that this consolidation period
would last bit longer before Markets see fresh up move.
Overall, today, we continue with our advice to remain light
on exposure and make very sector and stock specific purchases. Shorts should
still be avoided as the Markets may see bouts of short covering and the
volatility would continue to remain ingrained in some sessions to come. While
remaining light on positions cautious outlook is continued to be advised for
today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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