MARKET REPORT August
21, 2014
The Markets took a breather yesterday after five days of
gains on expected lines and consolidate at higher levels to end the day with
modest losses. The Markets opened on a mildly positive note and immediately
formed its day’s high of 7922.70 in the early minutes of the trade. Thereafter,
it slipped into the red to trade with minor losses. For the entire session, the
Markets traded more or less in sideways trajectory of 25-odd points and never
really broke down or saw any upward spikes. The Markets spent the entire
session in this manner trading sideways with capped losses while it made its
day’s low of 7864.05 towards the end. It finally ended the day at 7875.30,
posting a net loss of 22.20 points or 0.28% while forming a mildly higher top
and lower bottom on the Daily Bar Charts.
MARKET TREND FOR TODAY
Today as well, we can fairly expect the Markets to open on a
quiet note and look for directions in the initial trade. There are chances that
the Markets continue to consolidate and even see mild correction from higher
levels in case of an up move. There would be likely shift in the sectoral
performance and the Markets are likely to remain in overall pattern formation.
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 Chart is
61.7395 and it remains neutral showing no bullish or bearish divergences or any
failure swings. The Daily MACD remains bullish trading above its signal line.
On the derivative front, NIFTY August futures have shed
nearly 1.58 lakh shares or 1.04% in total open interest. This signifies that
there has been some profit taking that has been observed from higher levels
yesterday.
Going by the pattern analysis, the Markets remaining in the
overall formation that we have been discussing in previous editions. Further,
there has been additional formation of a trend line within the original
formation and the Markets may find pattern resistance there as well. Given
this, there are fewer chances that the Markets may see a run-away rise without
showing any consolidation at these levels. If it happens, then the
sustainability would be under question.
Overall, the Markets are likely to remain in consolidation
mode and show some jerks on both side and the session may remain ingrained with
some moderate amount of volatility. Sectoral and stock specific out performance
would continue. Given this reading, cautious outlook is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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