MARKET REPORT September
10, 2014
The Markets continued to correct on the second day in a row
as it opened negative and ended the day with losses. On back of weak technical
factors and also weak global markets, the Markets opened on a modestly negative
note. Post negative opening the session witnessed a range bound negative trade
in the morning session. In the second half, the Markets saw some more weakness
creeping in as it kept gradually losing more ground. In the second half of the
session, the Markets formed its intraday low of 8082.10. It did make a feeble
attempt to recover from the lows but could not sustain that effort. The Markets
finally ended the day at 8094.10, posting a net loss of 58.85 points or 0.72%
while forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, SEPTEMBER 11, 2014
Tomorrow’s opening would be extremely crucial for the
Markets. We have observed that the Markets have shown a throwback after
attempting to breakout. The Market is expected to open on a mildly negative
note tomorrow. It would be extremely important for the Markets to trade above
8080-8090 levels. Any dip below this would take the Markets inside the broad
trading range again and the breakout signal would become invalid.
The levels of 8135 and 8180 would act as immediate
resistance. The levels of 8040 and 8005 are likely to act as supports.
The RSI—Relative Strength Index on the Daily Chart is
65.0487 and it has just crossed below its topping formation which is a bearish
sign. However, it remains neutral as it shows no bullish or bearish divergence
of any failure swings. The Daily MACD continues to trade above its signal line.
On the derivative front, the NIFTY September futures have
shed further over 6.90 lakh shares or 4.55% in Open Interest. This is clear
indication that the long unwinding at higher levels has continued and there has
been clear reduction in the long positions.
Going back to pattern analysis, the Markets had attempted a
breakout as it move passed the levels of 8080-8010. However, after making of
top around 8180, it has shown a throw back and has come again at a place from where
it broke out. However, it would be important to see if the Markets reverses or
else any downside from here would take the Markets once again within the
broadening formation and the levels of 8180 would be come immediate top and the
attempt to breakout would turn out to be a false signal or whipsaw.
Overall, the opening levels and the trading of the Markets
above 8080-8100 would decide the trend for this particular session as well as
for coming days. It is advised to continue with the policy of stringent profit
protection at higher levels even if it comes at the cost of booking profits bit
early. Very selective purchases may be made as sectoral out performance would
be seen. But it is advised to keep purchases at moderate levels and continue to
maintain caution for the day.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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