MARKET REPORT June
20, 2014
The Markets spent yesterday’s session while consolidating in
a very narrow band and ending the day with modest losses. The Markets opened on
a modestly positive note and formed its day’s high of 7606.45 in the early minutes
of the trade. After hovering around these levels, the Markets gradually pared
its gains to trade flat and dipping in the negative territory thereafter. The
Markets, after trading in capped sideways movement for a while, slide further
to touch the day’ s low of 7502.45. In the afternoon trade, the Markets managed
to recover most of its gains as it trade flat in the last hour of the trade.
However, Markets again saw some paring of gains by the end of the session and
finally ended the day at 7540.70, posting a modest loss of 17.50 points or
0.23% while forming a lower top and lower bottom on the Daily High Low Charts.
MARKET TREND FOR TODAY
The Markets are again slated to open on a flat to mildly
positive note and look for directions. The analysis would continue to remain
more or less on yesterday’s lines and the bias certainly remains on the
corrective side. It is likely that the Markets show some strength in the first
part of the session and again some correction sets in as me move ahead in the
session. Volatility shall continue to remain ingrained in the Markets.
For today, the levels of 7590 and 7625 would act as
immediate resistance for the Markets. The supports exists much lower at 7410
and then at 7335 levels.
The lead indicators continue to point towards corrective
bias. The RSI—Relative Strength Index on the Daily Chart is 61.7448 and it has
reached its lowest value in last 14-days which is bearish. Further RSI has
formed a fresh 14-day low wherein NIFTY has not and this is Bearish Divergence.
The Daily MACD is bearish as it trades below its signal line.
On the derivative front, NIFTY June futures have added
nominal 85,700 shares or 0.61% in Open Interest. No major build up of positions
were seen on either side in yesterday’s session.
As per pattern analysis, as we have often repeated in our
previous editions of Daily Market Trend Guide, there has been temporary top
formation at 7700.05 levels and until this levels are breach on the upside, the
Markets would continue to remain subjected such consolidation / corrective
activities. The bias is further tilted towards corrective activities as
suggested by the lead indicators.
All and all, the Markets trade in a capped trading range and
are continuing to consolidate with corrective bias. Investors are advised to
continue to remain very moderate on their exposures which should remain limited
to defensives. While remaining ultra selective on the fresh purchases, very cautious
outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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