Thursday, May 15, 2014

Daily Market Trend Guide -- Thursday, May 15, 2014

MARKET REPORT                                                                                  May 15, 2014
The Markets which are now habituated with creating new records every day, created a another record yesterday, though of a different kind. After nine years, i.e. after 1st June 2005, it was first time that the NIFTY closed unchanged. The Markets opened on a very quiet note yesterday as expected and soon formed its intraday high of 7142.25 in the first hour of the trade. However, the Markets then consolidated for the rest of the session and remained capped in 20-odd points range on either side. The Markets soon pared all of its gains and by afternoon trade traded absolutely flat. It later dipped into the red while it formed its intraday low of 7080.60. It recovered a bit from those levels and closed exactly at it previous close of 7108.75 while forming a lower top and higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

The election results are coming out tomorrow and today as well, the Markets are likely to see a quiet opening and are likely to continue to consolidate at higher levels. Though intraday trajectory would continue to remain critically important the overall analysis continues to remain same as that of yesterday. There are chances that the Markets see some profit booking before the event tomorrow.

For today, the levels of 7140 and 7172 would act as resistance. The supports exist much lower at 7020 and 6940 levels.

The RSI—Relative Strength Index on the Daily Chart is 76.1713 and it has reached its highest level in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD remains bullish as it continues to trade above it signal line. On Candles, a spinning top has occurred. This indicates a potential top formation.

On the derivative front, the NIFTY May futures have added another 10.13 lakh shares or 6.33% in Open Interest.

Going by the pattern analysis, the Markets now continue to trade in “Overbought” territory and there are signs of a potential top formation at 7172 levels. Before the election results come out the Markets may either consolidate in a given range with 7172 acting as its potential top OR might see some profit taking ahead of the event.

Overall, we continue with our advice of remaining moderate with the positions. Shorts should be avoided but any up move should be utilized to protect any existing profits. Any fresh positions should be taken moderately and heavy exposures and leverage should be strictly avoided. While maintain moderate exposures, continuance of high degree of caution is advised for today.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.