MARKET REPORT September
02, 2014
The Markets had a stable and robust start to the new series
as it expectedly opened strong on back of strong GDP Data, traded sideways only
to get stronger and ended the day with decent gains. The Markets saw a nearly
gap up opening and it traded sideways while maintaining those gains in the
first half of the session. The Markets saw some more strength coming in the
second half of the session as it strengthened further. It went on to form the
day’s high of 8035 towards the end of the session though it continued to resist
at the rising trend line for the most part of the day. Markets maintained those
levels and finally ended the day at a fresh lifetime high at 8027.70, posting a
net gain of 73.35 points or 0.92% while forming a higher top and higher bottom
on the Daily Bar Charts.
MARKET TREND FOR TUESDAY, SEPTEMBER 02, 2014
Tomorrow would be a crucial day for the Markets. Technically
speaking, the Markets are likely to see positive opening as it has closed near
the high point of the day. With the opening trade expected to be in positive,
the behaviour of the Markets vis-à-vis the
levels of 8040-8050 would be very crucial as it might meed resistance to the
rising trend line of the current broadening formation on the Close charts.
The levels of 8050 and 8075 might act as resistance as the
Markets would then trade in uncharted territory. The supports would come in
much lower at 7930 and 7875 levels.
The RSI—Relative Strength Index on the Daily Chart is
70.2587 and it has reached the highest value in last 14-days which is bullish.
But it does not show any bullish or bearish divergence and it has also now
entered the “overbought” territory. The Daily MACD continues to trade above its
signal line.
On the derivative front, NIFTY September series have begun
by adding over 3.89 lakh shares or 2.44% in Open Interest. This shows fresh
positions on the long side have been added and this might aid positive trade
the next session.
Returning to pattern analysis, as mentioned earlier, the
Markets continue to remain in the broadening formation and this formation is
read on the Close (line) charts. With today’s rise, the Markets have close near
its resistance of rising trend line as evident from the Daily Charts and it has
not yet achieved the breakout. If it achieves a breakout on the upside the
would drift further in the “overbought”
territory would be then make any such rise unhealthy.
Given this reading, there is fair amount of chance that the
Markets may see positive opening and trades positive in the initial trade.
However, given the overall reading on the Close charts the chances of some
profit taking at higher levels just cannot be ruled out. Given this, while maintaining
adequate liquidity, cautious outlook 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.