MARKET REPORT September
23, 2014
Though we can blame anything from weak economic signals from
Euro zone and possible rise in unemployment in China or rising geopolitical risks, actually weak technials
played its part today in the Markets, much on expected lines as the Markets
ended the day with a deep cut. After opening on a quiet note, the Markets
showed some short lived upward momentum while it formed its day’s high of 8159.75. However,
after staying briefly in to the green, the Markets slipped into the negative
territory. It continued to trade with capped losses in the first half of the
session. The second half saw more weakness coming in as the Markets started to
pare grounds rapidly. Showing no signs of recovery from lower levels, the
Markets went on to form the day’s low of 8008.10, coming off nearly 150-odd
points from day’s high. It finally ended the day at 8017.55, posting a deep cut
of 128.75 points or 1.58% while forming a lower top and sharper lower bottom on
the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, SEPTEMBER 24, 2014
Technically speaking, the Markets have reaffirmed that the
levels of 8180 would stay as immediate top for the time being. With the Markets
closing near the low end of the day, we can expect a subdued opening tomorrow.
The Markets may open quiet or mildly negative and might continue to drift, at
least in the initial trade. Any pullback, if at all it sees, is all likely to
remain short lived.
The levels of 8100 and 8160 would act as resistance and the
supports would come in at 7940 and 7910 levels.
The RSI—Relative Strength Index on the Daily Chart is
51.6951 and it remains neutral as it shows no bullish or bearish divergence or
any kind of failure swings. The Daily MACD remains bearish as it trades below
its signal line. On the Candles, a big black candle has occurred
signifying the credibility of the resistance.
On the derivative front, both rollovers and unwinding of
positions continued. The NIFTY September futures shed over 9.73 lakh shares
whereas October series added over 28.32 lakh shares or 40.58% in Open Interest.
The pattern analysis of the
Daily Chart clearly shows the significance of the resistance that the broadening
formation has posed before the Markets. The Markets tried to break out of the
upper rising boundary line and failed to do so. Further, it gave up and came
off quite a bit with heavy volumes and thus re-validating the resistance.
Overall, the bias of the Markets will now remain on the
downside. Any pullbacks would be technical pullbacks and fresh breakout would
occur only above 8180 levels. Any up swings, until this happens would remain
quite volatile and with all likelihood will get sold into. Therefore, any fresh
positions should be taken selectively in non-index components and quality
stocks. While keeping overall leverage in control, caution is continued to be
advised.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
+91-98250-16331
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