MARKET REPORT June
23, 2014
Markets continued to witness consolidation on Friday as it
opened flat and spent the most part of the session in a capped range but ended
the day with losses. The Markets opened on the modestly negative note and spent
the morning trade in 20-odd points range while moving in and out of positive
territory. It went on to post some more gains in late morning trade as it
formed its day’s high of 7560.55. The Markets again spent the afternoon session
in a sideways manner but in the late afternoon trade pared its gains to trade
flat. The Markets weakened further as it went on to dip into negative and form
its day’s low of 7497.30. No major recovery was seen from these levels and the
Markets finally ended the day at 7511.45, posting a net loss of 29.25 points or
0.39% while forming a lower top and similar bottom on the Daily High Low
Charts.
MARKET TREND FOR TODAY
The analysis continues to remain on similar lines as we have
had in the previous week. As evident from the Daily Charts, the Markets have
been consolidating in a range bound manner with a negative bias. Today as well,
we can expect the Markets to open on a modestly positive note but there are
also chances that it pares its gains as we go ahead in the session. Further,
with the expiry week beginning from today, there are chances that the sessions
from today onwards also continue to remain dominated with rollover activities.
For today, the levels of 7540 and 7575 would act as
resistance levels for the Markets. Supports exist at 7480 and further down at
7420 levels.
Lead indicators continue to point towards continuing
correction. The RSI—Relative Strength Index on the Daily Chart is 59.1375 and
it has reached its lowest value in last 14-days which is Bearish. Further, the
RSI has set a new 14-period low but NIFTY has not yet, and this is Bearish
Divergence. The Daily MACD continues to trade below its signal line.
On the derivative front, NIFTY June futures have shed over
2.46 lakh shares or 1.74% in Open Interest. This shows some more shedding /
offloading of positions was seen on Friday.
Going by the pattern analysis, the Markets have retraced
after intermediate top formation at 7700.05 levels. As often repeated in our
previous editions of Daily Market Trend Guide, the fresh up move shall occur
only after the Markets moves past these levels. Until this happens, we would
continue to see range bound consolidation happening with a negative bias.
Further, in event of Markets moving below the levels of 74870, some more weakness
is expected to creep in.
All and all, under the given scenario, it is advised to
remain light on positions and continue to have just moderate exposure in the
Markets. Any purchases should be done selectively and profits should be
vigilantly protected at higher levels. While adopting a stock specific approach,
cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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