MARKET REPORT September
17, 2014
The Markets had a volatile session and it moved in either
direction before settling with modest gains after two days of losses. The
Markets saw a strong opening, and proceeded to form its day’s low of 7990.65 but
soon pared all of its gains subsequently to trade nearly flat. Though quite good amount of volatility was
witnessed in the trade it never really dipped into the negative. The Markets
then spent the rest of the session in a capped and narrow range. It did never
attempted to move upwards nor did it break down on the downside. After spending
the session in this manner, the Markets finally ended the day at 7975.50,
posting a modest gain of 42.60 points or 0.54% while forming a lower top and
slightly higher bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, SEPTEMBER 18, 2014
Speaking purely on technical terms, the Markets have just
halted its decline and there are chances that the weakness might continue to persist
for some more time. Expect the Markets to open on a quiet note but at the same
time, there are chances that it continues to bear negative bias and any rise may
counter some more profit booking at higher levels. Possibilities of testing the
level of 50-DMA cannot be ruled out.
The levels of 8045 and 8070 are expected to act as
resistance. The supports would come in at 7820 and 7775 levels.
The RSI—Relative Strength Index on the Daily Chart is
51.4293 and it remains neutral as it shows no bullish or bearish divergences or
failure swings. The Daily MACD continues to remain bearish as it trades below
its signal line. On the Candles, A Bullish
Harami has occurred. When such pattern is observed during a uptrend, as in
case of NIFTY, this bullish harami pattern is considered bearish and
signals potential continuance of the corrective activity.
On the derivative front, NIFTY September futures have shed
yet another 2.82 lakh shares or 2.19% of Open Interest. This clearly indicates
that profit taking and unwinding of positions have continued in the Markets.
Returning to pattern analysis, the Markets have formed a
immediate top and have returned within the broadening formation. This implies bearish
repercussions as such formations appear while formation of a major top. There
are chances that the Markets may see pullbacks but these are likely to remain
in overall downward bias of the Markets.
Overall, it is clear that any uptrend that the Markets will
now see are likely to remain short lived and might be encountered with selling
pressure from higher levels. Any purchases should be kept limited to non-index
components and defensives. This should be done selectively and only if such
sectoral indices are not overbought or have given sell signals. While
maintaining much vigil, cautious approach should be continued.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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