MARKET REPORT August
06, 2014
The Markets saw a very volatile session yesterday especially
after announcement of RBI Credit policy as it swung in either direction before
closing with modest gains. The Markets opened on a quiet and mildly positive
note on expected lines and spent the morning session in a very narrow and
sideways movement while briefly dipping into the red. Post RBI Announcement
wherein it kept Repo, Reverse Repo Rate unchanged and reduced SLR by 0.50%, it
saw some wild reaction to it. After seeing a brief spurt, the Markets saw a
volatile and sharp dip wherein it lost nearly 70-odd points from its opening
levels and went on to dip into negative and form the day’s low of 7638.55.
However, post this knee-jerk reaction, the Markets saw some slow but steady
recovery which saw some more strength towards the end. The Markets not only
recovered all of its losses but form the day’s high of 7752.45 in the last
minutes of the trade. It finally ended the day at 7746.55, posting a net gain
of 62.90 points or 0.82% while forming a higher top and higher bottom on the
Daily High Low Charts.
MARKET TREND FOR TODAY
Today, expect the Markets to open on a quiet and mildly
negative note and take some breather from the advances that it has been making.
We can expect the Markets to open on a mildly negative note and in attempt to
recover in the later stage meet some of its pattern resistance levels. Some
consolidation is expected to take place again and we can see some intermittent
bouts of profit taking again.
For today, the levels of 7780 and 7825 would act as
immediate resistance for the Markets. Supports come in much lower at 7680 and
7630 levels.
The RSI—Relative Strength Index on the Daily Chart is
56.1588 and it is neutral as it show no bullish or bearish divergence or any
kind of failure swing. The Daily MACD continues to remain bearish as it trades
below its signal line.
On the derivative front, NIFTY August futures have added
over 3.74 lakh shares or 2.93% in Open Interest. The NIFTY PCR stands at 0.87
as against 0.86 yesterday.
Going by the pattern analysis, the Markets continue to remain
in overall “Broadening Formation”. Therefore, the overall behaviour of the
Markets is likely to change. We would no live more in the era of technical
pullbacks than fresh breakouts until the Markets moves past previous highs that
it has formed. While continuing to encounter pattern resistances, the volumes
remain typically low in pullbacks under such structure.
Overall, the Markets are likely to see a subdued opening
today. Following quiet opening, it would be important to guard profits at any
higher levels very vigilantly. Fresh purchases may be made selectively as
sectoral out performance would be seen. While maintaining adequate liquidity,
neutral outlook for the Markets is maintained for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.