MARKET REPORT October
09, 2014
Breaking a losing streak of three days, the Markets staged a
very smart pullback today and ended the day with decent gains. The Markets saw
a better than expected opening and after opening on a positive and stronger note
the Markets effortlessly maintained those opening gains in the first half of
the session. Markets saw some further strength coming in the second half of the
session as it perked up further and went on to form the day’s high of 7972.35.
No significant pressure of any kind was seen even at higher levels as the
Markets spent the final hour of the trade in sideways movement. It finally
settled the day at 7960.55, posting a very decent gain of 117.85 points or
1.50% while forming a higher top and higher bottom on the Daily Bar Charts, though
the volumes remained little lower for the day.
MARKET TREND FOR FRIDAY, OCTOBER 10, 2014
Since the Markets have ended near the high point of the day,
we can expect the Markets to give a positive opening in the initial trade.
However, in order to capitalize on the gains the Markets will have to surge
ahead with good participation, i.e. volumes. The absence of enough
participation would be a tool enough to keep the Markets in the broad trading range.
Therefore, intraday trajectory, along with volumes would be critical to decide
the trend for the immediate short term.
The levels of 7995 and 8055 would act as immediate
resistance for the Markets. The support would come in lower at 7912 and 7820
levels.
The RSI—Relative Strength Index on the Daily Chart is
49.8354 and it is neutral as it shows no bullish or bearish divergence or
failure swings. The Daily MACD still continues to remain bearish as it trades
below its signal line.
On the derivative front, the NIFTY October futures have
added nominal 96850 shares or 0.59% in Open Interest. The another way to
interpret this figure would be to say that since there has been no reduction in
Open Interest, the rise that was seen was not due to short covering and this
increases the chances for the rise to percolate to the next day.
Examining the pattern on the Daily Charts, Markets are
continuing to trade in broad 150+ points of trading range. On the lower side,
the Markets have taken support at the 50-DMA levels and its filters and the
trend support at 7815 levels. So long as Markets trades above these levels,
broad consolidation would continue but some amount of volatility would continue
to remain ingrained in the trade.
Overall, with Infosys coming out with numbers tomorrow, the
IT pack would continue to witness volatile movement and Markets too, to some
extent would react to this. Apart from this stock specific purchases and action
would continue but as mentioned earlier volumes will have to be higher in order
to have a sustainable and longer pullback. Overall, continuance of caution with
very selective purchases is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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