MARKET REPORT August
26, 2014
Technically weak Markets got the blame the Supreme Court
today as after a buoyant session; it gave up all of the gains to end the day
with nominal losses. The Markets opened on a positive note, contrary to what
was expected. After opening positive, the Markets kept strengthening itself as
it kept making gradual highs. Without exhibiting much of the volatility, the
Markets went on to form the day’s high of 7968.25. After marking yet another
lifetime high, the Markets saw a sudden pressure being exerted on the Markets.
News flow of a Supreme Court Judgment was to blame but the Markets were anyways
technically weak. It suddenly pared all of its gains in a sharp and rapid
manner and dipped into the red to form the day’s low of 7897.95. It came off
nearly 70-odd points from its day’s high and finally ended the day at 7906.30,
posting a net loss of 6.90 points or 0.09% while forming a higher top and
higher bottom on the Daily Bar Charts.
MARKET TREND FOR 26TH AUGUST 2014
Tomorrow’s session is likely to be a acid test for the
Markets. The opening levels would decide the trend for tomorrow as the Markets
have failed to move past the rising trendline despite being in the broad
formation. The maintenance of levels of 7925 and upwards would be necessary for
the Markets to maintain its up move. However, being the expiry week the rollovers would also dominate the Markets.
The levels of 7920 and 7965 would act as immediate
resistance. The supports are seen at 7840 and 7805 levels.
The RSI—Relative Strength Index on the Daily Chart is
63.1140 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD too trades above its signal line.
On the derivative front, NIFTY along with other key stocks continued
to see rollovers. NIFTY August Series shed over 15.33 lakh shares or 10.67% in
Open Interest whereas September series added over 11.77 lakh shares or 38.90%
in Open Interest. The NIFTY PCR however remained unchanged.
Going back to pattern analysis, as mentioned in the
yesterday’s edition of Daily Market Trend Guide, the Markets continues to
remain in a topping out process and formation. Within that even if it sees such
rapid advances, it would continue to see such corrective pressures as well. The
Markets continues to trade within a specified range.
Overall, with the Markets under Broadening Formation, it
would continue to see ranged and volatile movements. Even if we see short
coverings or rollover centric advances or spurts the overall bias would still
continue to remain on downside. While keeping purchases very limited any such
rallies should be used to protect the existing profits. Cautious outlook is
advised as any up move is likely to meet such corrective pressures.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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