MARKET REPORT May
22, 2014
The Markets showed first signs of correction yesterday as it
witnessed a selloff but recovered bulk of its gains to end the day with modest
losses. The Markets opened on a quiet and mildly negative mode but soon came
into positive territory while it formed its day’s high of 7287.15. However, it
remained in the positive for very brief period as it started drifting into the
red. The markets traded with capped losses in the morning trade but saw a good
amount of weakness creeping in the afternoon trade. The Markets went further
into the red and formed its day’s low of 7206.70 by late afternoon trade. It
however recovered nearly 50-odd points from those lows and finally ended the
day at 7252.90 still with a net loss of 22.60 points or 0.31% while forming a
lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a modestly positive
note and continue with its recovery at least in the initial trade. However,
given the other factors, the Markets are likely to continue to remain overall
in the consolidation / corrective mode. Though intraday trajectory would
continue to remain critical the Markets are overall remain capped on the upper
side with some amount of volatility ingrained in it.
For today, the levels of 7290 and 7345 are immediate
resistance levels for today. The supports exists at 7205 and 7160 levels.
The RSI—Relative Strength Index on the Daily Chart is
78..6147 and it is neutral as it shows no bullish or bearish divergences or any
failure swings. It however continues to trade in “overbought” territory. The
Daily MACD continues to trade above its signal line.
On the derivative front, NIFTY May futures have added nearly
5.03 lakh shares or 2.33% in open interest. This shows some fresh buying done
yesterday while the Markets recovered some 50-odd points from its day’s low.
Going by the pattern analysis, the Markets have made a
temporary top on May 16th as we have mentioned often in our previous
editions and this will continue to act as a immediate top. The Markets would
either continue to correct or would continue to consolidate in this broad range
with the bias on the downside. This downside bias would persist so long as the
Markets continue to trade “overbought”.
Overall, the Markets would see some initial uptick but the
possibilities of the consolidation / correction cannot be ruled out. Further
with FIIs remaining net sellers in last 2 sessions, this is likely to persist
today as well and this may keep the Markets volatile. We continue to reiterate
our advice of maintaining very moderate exposures in the Markets while adopting
a cautious approach for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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