Thursday, August 7, 2014

Daily Market Trend Guide -- Thursday, August 07, 2014

MARKET REPORT                                                                                 August 07, 2014 
The Markets took a corrective turn again, much on expected lines as it opened negative and ended the day with losses. The Markets opened on a modestly negative note and continued to trade with capped losses in the morning session. Though this time kept the losses under check but the bias continued to remain negative. It drifted some more on the downside in the afternoon trade, only to recover a bit again. However, the last hour and half of trade saw some more weakness creeping in as the Markets continued to drift lower again. It went on to form the day’s low of 7658.95 towards the end of the session. No major recovery was seen and the Markets finally ended the day at 7672.05, posting a net loss of 74.50 points or 0.96% while forming a slightly lower top but higher bottom on the Daily High Low Charts.


MARKET TREND FOR TODAY

Today, expect the Markets to once again open on a quiet note and look for directions. Though intraday trajectory would be crucially important to decide the trend for today, the overall session is likely to remain in a range while the Markets continuing to resist at certain pattern resistances while remaining in the broadening formation.

For today, the levels of 7720 and 7745 would act as immediate resistance for the Markets, the supports come in at 7620 and 7580 levels.

The RSI—Relative Strength Index on the Daily Chart is 50.99 and it has reached its lowest levels in last 14-periods. Though it does no show any bullish or bearish divergence. The Daily MACD continues to remain bearish as it trades below its signal line. 

On the derivative front, NIFTY August futures have added 6.06 lakh shares or 4.62% in Open Interest. This shows that some fresh shorts have been added in yesterday’s decline that has led to increase in open interest.

Going by the pattern analysis, the Markets continue to remain in broadening formation. Having said this, the Markets are likely to trade in a range, remain range bound while giving intermittent pullbacks on lower volumes. It would continue to resist to its key pattern resistances. Until the Markets goes for a clear breakout again, such pattern of trades would continue wherein the Markets sees intermittent pullback with overall corrective bias.

Overall, it is continued to be advised to protect profits at higher levels vigilantly. Stock specific approach should be maintained as selective out performance would continue. Still, overall exposures should be curtailed. While maintaining adequate liquidity, cautious outlook is advised for the Markets.

Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331


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