MARKET REPORT September
16, 2014
The Markets traded precisely on expected lines as it saw a
serious correction setting in and ended the day with deep slice. Following weak
technicals, the Markets opened on a negative note and traded with capped losses
in the first half of the trade. However, after the morning session, the Markets
saw some selling pressure coming in. This pressure got intensified in the
second half of the session as the Markets rapidly lost ground. It went on to
form the day’s low of 7925.15 towards the end of the session. Such selling
pressure persisted and the Markets showed no signs of recovery at all at any
point of time. The Markets, while showing no signs of recovery, ended the day
at 7932.90, with a deep cut of 109.10 points or 1.36% while forming a sharply
lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, SEPTEMBER 17, 2014
The failure of the breakout from the rising trend upper
trend line has been completely validated. Technically speaking, the Markets are
likely to open on a weaker note and have bright chances to continue with its
downward trajectory. If such trend persists, there are chances that the its
goes on to test the 50-dma levels.
The levels of 8040 and 8190 would act as immediate
resistance whereas the levels of 7860 and 7815 would act as support.
The RSI—Relative Strength Index on the Daily Chart is
47.8778. Though it does not show any bullish or bearish divergence, it has
reached its lowest value in last 14-days which is bearish. The Daily MACD
confirms it negative crossover and is bearish while it trades below its signal
line.
On the derivative front, the NIFTY September further have
continued to shed 5.29 lakh shares or 3.93% in Open Interest. This makes one
thing very evident that the decline in Markets is direct result of unwinding of
positions and pure selling.
Going by the pattern analysis, it is very much evident that
the broadening formation that we have been mentioned over last couple of
occasion has persisted and the Markets have failed to break out of that. The
attempt to breakout has proved to be a false signal or a whipsaw and the
Markets are back inside that broadening formation with a negative bias.
All and all, we continue to reiterate to exercise caution in
the Markets. Even if the Markets see a minor pullback, it is likely to remain
very short lived as the bias certainly remains on the downside. Any further
weakness would have the Markets test its 50-DMA levels. Even if the Markets consolidate
a bit the chances of it continuing with the downward trend is likely for the
immediate short term. Overall, caution is advised in the Markets.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
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