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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