MARKET REPORT October
08, 2014
Markets spent yet another session in a very capped and
narrow range and ended the day with nominal losses while IT and Pharma shares
took serious beating, especially IT shares after downgrade of Infosys. The
Markets opened on absolutely flat note and after momentarily dipping into the
red crawled back in the positive territory. It saw some selling pressure coming
in which sent the Markets back in the negative territory. The Markets remained
overall range bound but equally volatile while it tested its pattern support
while forming day’s low of 7815.75. In the last hour of the trade, the Markets
saw a sharp recovery from lower levels. It not only dragged itself in to the
positive territory again but formed the day’s high of 7869.90. This recovery
was pared again as the Markets came off and finally ended the day at 7842.70,
posting a nominal loss of 9.70 points or 0.12% while forming a lower top and
lower bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY, OCTOBER 09, 2014
The Markets tested its pattern support levels of 7818 while
it made its low of 7815.75 but has closed above that. The Markets are likely to
open on a modestly positive note and trade positive in the initial trade.
Though intraday trajectory would remain grossly important to decide the trend
for the session, it would be critically important for the Markets to maintain
levels above of 7815-7818 mark.
The levels of 7870 and 7920 would act as resistance. The
supports are expected to come in at 7815-7818 and 7760 levels.
The RSI—Relative Strength Index on the Daily Chart is
39.8405 and it has reached its lowest value in last 14-days which is bearish.
It does not show any bullish or bearish divergence as such. The Daily MACD
remains bearish as it trades below its signal line.
On the derivative front, the NIFTY October futures have
added 50,500 shares or nominal 0.31% in Open Interest. This signifies that
though the Markets remained range bound and volatile, there was no unwinding of
open positions seen.
Returning to pattern analysis, as mentioned in our previous
edition, the Markets continue to remain in a broad formation. They have closed
below the 50-DMA but are still within in filters and also trade above its
neckline support. It would be critically important for the Markets to remain
and trade above 7815-7818 levels. Any breach below these levels would induce
further weakness in the Markets.
Overall, the advisory remains on similar lines that of
yesterday. Though the Markets have not breached any serious support levels it
is also not likely to see any runaway rise as well and the action would remain stock
specific and limited with some sectoral out performance. Keeping this in view,
selective purchases may be made but with continued caution and while avoiding
any excess leverage. Continuance of positive caution 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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