MARKET REPORT August
27, 2014
The Markets on Tuesday saw much amount of volatility on
either sides but it managed to end the day on a flat note after some wild
swings. The Markets opened on negative note as expected and after briefly
trading in the red, it crawled briefly into the green to form the day’s high of
7915.45. As mentioned in our yesterday’s edition, the Markets resisted at this
level to its rising trend line drawn within the broad formation. The Markets,
after briefly trading in capped range slipped again into the red. The rest of
the session saw the Markets under pressure as it kept forming new lows
gradually. In the late afternoon trade the Markets went on to form the day’s
low of 7865.45. The last hour and half of the trade saw some sharp rollover
related short covering as the Markets managed to recoup nearly all of its
losses. It finally managed to end the day nearly flat at 7904.75, posting a
very minor loss of 1.55 points or 0.02% while forming a lower top and lower
bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, 27TH AUGUST,
2014
Tomorrow’s analysis continue to remain more or less on
similar lines like today. The Market opening and its subsequent behaviour vis-à-vis
the levels of 7910-20 zone would critically affect the trend. It would be
necessary for the Markets to maintain levels above of this along with
reasonable volumes in order to avoid any further pressure coming in. Over and
above this, the rollovers too would dominate as we enter the penultimate day of
expiry.
The levels of 7910-20 zone and 7965 would continue to act as
resistance levels. The supports would
come in at 7840 and 7805 levels.
The RSI—Relative Strength Index on the Daily Chart is
62.9500 and it remains neutral as it shows no bullish or bearish divergences or
any failure swings. The Daily MACD continues to remain bullish as it trades
above its signal line.
On the derivative front, NIFTY rollovers continued as August
series shed over 23.21 lakh shares or 18.09% in Open Interest while NIFTY
September series saw addition of over 23.93 lakh shares or 56.93% in total Open
Interest. The NIFTY PCR saw a negligible change over the previous day.
Taking a look at pattern analysis, again the reading remains
more or less same like that of yesterday. The Markets continues to remain on
broadening formation and within that it is resisting to a rising trend line
inside that. The net effect is that the Markets will continue to consolidate in
near term and in case of up move will not see a breakaway rise while it
continues to remain in the broad
pattern.
Overall all, the Markets are continued to see a ranged
movement with some amount of volatility remaining ingrained in it. Volatility
would also be induced by rollovers as we are in the penultimate day of expiry
of current series. Keeping this and other overall technical structure of the
Markets in view, it is continued to be advised to avoid making over-purchases.
Any up moves within the broad range should be utilized to protect profits at
higher levels. Cautious outlook is continued to be advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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