MARKET REPORT August
22, 2014
The Markets traded yesterday on expected lines as it
witnessed ranged bound volatility and ended the day with nominal gains. The
Markets opened on a quiet note and soon gathered some strength to inch upwards.
It went on to form the day’s high of 7919.65 in the morning trade. However,
after hovering around those levels for a while, it saw some minor profit taking
coming in as the Markets pared all of those morning gains. It momentarily
dipped into the red forming the day’s low of 7855.95 in the mid afternoon
trade. It did manage to crawl back into the green after that but continued to
trade within a capped range. The Markets finally ended the day at 7891.10,
posting a minor gain of 15.80 points or 0.20% while forming a similar top and
slightly lower bottom (almost a parallel bar) on the Daily Bar Charts.
MARKET TREND FOR TODAY
Today’s analysis would remain more or less on similar lines
that of yesterday. We can expect the Markets to open on a flat and quiet note and
look for directions. The Markets continue to resist to a trend line drawn
within a broad formation and therefore the intraday trajectory and the volumes
would play a major role in determining trend for today. Volumes remained a
concern in the yesterday’s trade.
For today, the levels of 7920 and 7945 would act as
resistance on the Daily Charts. The supports come in at 7810 and 7765 levels.
The RSI—Relative Strength Index on the Daily Charts is
62.5897 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD remains bullish as it trades above its signal
line.
On the derivative front, NIFTY August futures have shed over
3.85 lakh shares or 2.56% in Open Interest. This implies some unwinding of long
positions in the current derivative series.
Looking at the trend and pattern analysis, while remaining
in the overall broad formation, the Markets have resisted to a trend line drawn
within that. Further to that, for any up move to occur, volumes / participation
would play a major role and this is what is seen on lower side since last
couple of sessions. However, even with immediate or short term up move, the
Markets would continue to remain in the major broad formation.
Overall, today’s strategy would remain more or less on
similar lines. More emphasis should be laid on defensives while taking long
positions or if not this then they should be taken ultra selectively. This is
because the Markets show all sings of continuing with consolidation but stock
specific out performance would continue. Overall, continuance of cautious
optimism is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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