MARKET REPORT June
26, 2014
Yesterday’s day was spent in absolute consolidation as the
Markets virtually spent the entire session in a very capped and narrow 20-odd
points band and ended the day with minor losses. The Markets opened on a mildly
positive note and soon formed its intraday high of 7589.25 in the early minutes
of the day. The Markets hovered around those levels for a while and then
slipped into the red. It remained in the red for the rest of the session making
minor and intermittent recoveries but never moved back in the positive
territory. The Markets remained absolutely direction-less with a negative bias
and finally managed to end the day at 7589.25, posting a net loss of 10.95
points or 0.14% while forming a similar top and a higher bottom on the Daily
High Low Charts.
MARKET TREND FOR TODAY
Today we enter the expiry day of the current June series and
the session, like yesterday, is likely to remain dominated with rollovers and
given some short positions, some intermittent jerks cannot be ruled out. The
Markets are again expected to open on a quiet note and look for directions.
Though the bias remains negative, sharp short covering, given the rollovers
cannot be ruled out. Volatility shall persist.
For today, the levels of 7595 and 7630 would act as
immediate resistance on the Daily Charts. The supports exist at 7510 and 7440 on
the downside.
The RSI—Relative Strength Index on the Daily Chart is
61.7439 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD remains bearish as it continues to trade below
its signal line.
On the derivative front, heavy rollovers continued as NIFTY
June series shed 20.97 lakh shares or 18.45% in Open Interest whereas NIFTY
July series added over 31.16 lakh shares or 39.93% in Open Interest. Market
Wide rollovers too have remained more or less near its 3-months average.
Going by the pattern analysis, the Markets have managed to
maintain levels above of 7510 and until that happens it is likely to continue
to consolidate. In event of any slippage below the levels of 7510, we may see
some more weakness creeping in. The Markets are currently in a broad trading
range, and also in somewhat no-trade zone given the direction-less trend in the
last couple of sessions. However, this can be termed as a capped and range
bound consolidation in the Markets.
Given this reading, it is advised to continue to take fresh
positions on highly selective basis and mainly on defensives. High beta stocks
should be avoided and overall leverage too should be controlled and liquidity
should be maintained. With the Markets likely to swing in either direction,
more due to expiry and also due to technical indicators, overall low amount of
exposure and caution are continued to be advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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