MARKET REPORT September
03, 2014
Frenzy continued on the Street today as the Markets scaled
yet another benchmark of 8100-level but caution too seemed evident as the
Markets ended the day with modest gains. The Markets opened on a modestly positive
note and remained positive in a capped range in the morning trade. The
sentiment remained buoyant though cautious as the Markets did not see any
selling pressure coming in the first half of the session. In the late afternoon
trade, the Markets went on to form the day’s high of 8141.90. In the last hour
and half of the trade, the Markets saw some sharp volatility as it lost
majority of its gains in a vertical fall. Though it attempted to recover again but
pressure seemed evident on the Markets. After struggling in a given range, the
Markets finally ended the day at 8114.60, posting a net gain of 31.55 points or
0.39% while continuing to form a higher top and higher bottom on the Daily Bar
Charts.
MARKET TREND FOR THURSDAY, SEPTEMBER 04, 2014
Tomorrow’s opening is likely to be on a cautious note and
some correction or some consolidation from higher levels cannot be ruled out.
Some weariness in the Markets was evident as the breadth had remained negative.
There are chances that even if the Markets see some positive movement, some
profit taking or churning of portfolios cannot be ruled out.
The levels of 8150-70 are likely to act as resistance and
the levels of 8052 and 7970 are supports in the nearest vicinity.
The RSI—Relative Strength Index on the Daily Chart is
74.3993 and it has reached its highest value in last 14-days. Though it does
not show any bullish or bearish divergence, it is trading in “overbought”
territory. The Daily MACD continues to trade bullish above its signal line.
On the derivative front, the NIFTY September futures have
added over 2.04 lakh shares or 1.22% in Open Interest. This shows that there
was some shedding of long positions but some shorts too seem to have been
initiated at higher levels.
As per pattern analysis, the Markets have attempted to breakout
of the broadening formation and might continue to trade higher for some time in
immediate short term. However, the resistance that it attempted to move past
shall act as support in case of some throwback happening and the chances of
such throwback happening are bright given the negative market breadth in the
previous session and the overbought condition of the Markets. There are also
chances that the Markets may come again in the immediate formation after a
throwback.
Give all this, the overall analysis and advice remains on
similar lines. Though it is always necessary to ride the trend, the level of
caution too needs to be elevated to avoid getting caught at higher levels. Long
positions should be taken with strict trailing stop losses and that too on very
selective note. Volatility is likely to persist. Outlook with elevated caution
is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.