Thursday, August 21, 2014

Daily Market Trend Guide -- Thursday, August 21, 2014

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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