MARKET REPORT September
21, 2014
The Markets chose to remain in consolidation stage once
again instead of breaking out as it traded in a capped range and ended the day
with very nominal gains. The Markets opened on a mildly positive note and after
dipping momentarily in the red, it pulled back in the morning trade to form the
day’s high of 8160.90. However, the early afternoon trade soon saw paring of
all those gains. Markets came off its intraday high by paring all of its gains.
It dipped little bit into negative again while forming the day’s low of
8105.35. Thereafter, the Markets spent
rest of the entire session in a very narrow and capped range. It neither saw any
sharp pullback nor did it saw any further weakness creeping in. After trading
in a narrow range in this fashion, it finally ended the day at 8121.45, posting
a net gain of 6.70 points or 008% while forming a mildly higher top and higher
bottom on the Daily Bar Charts.
MARKET TREND FOR MONDAY, SEPTEMBER 22, 2014
Just like Friday, the Markets continue to remain in little
precarious position. Unless the Markets breach out of the rising trend line and
move past its previous top, both of these would continue to act as immediate
resistance. Expect the Market to open once again on a quiet note. The intraday
trajectory and the behaviour of the Markets vis-à-vis the levels of 8130-8150
levels would remain very crucial.
The levels of 8140 and 8180 would act as resistance and the
levels of 7940 and 7910 would act as supports.
The RSI—Relative Strength Index on the Daily Chart is
61.2146 and it remains neutral without showing any bullish or bearish
divergence or any failure swings. The Daily MACD is bearish as it trades below
its signal line. On the Weekly Charts, the Weekly RSI stands at 73.0196 and it
trades in “overbought” territory. Further, though it does not show any failure
swing, the NIFTY has formed a fresh Weekly high but Weekly RSI has not yet.
This indicates Bearish Divergence. The Weekly MACD continues to trade above its
signal line.
On the derivative front, some rollovers seem to have begun. The
NIFTY September futures have shed over 8.41 lakh shares or 6.19% in Open
Interest. The October series have added 6.58 lakh shares in Open Interest.
Referring to pattern analysis again, the Markets have not
broken out comprehensively from the rising trend line. Further, it should be
noted that the referred line is “rising” and therefore, each day pauses a
higher figure for the Markets to post a break out. Until this happens, this
line as well as the previous high would continue to act as resistance and there
are chances that the Markets continue to remain in consolidation stage and
might see minor profit taking as well.
Going by all this, we reiterate defensive approach in the
Markets. Fresh purchases may be made as
stock specific activities would be seen. Sectoral out performance would
also be seen but at the same time profits should be protected at higher levels.
While keeping overall leverage under control, cautious outlook should be
maintained.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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