MARKET REPORT October
20, 2014
Markets reacted quite in line with the positive news flow
and global stability as it opened higher and ended the day with decent gains.
As expected, the Markets opened on a gap
up note and maintained its gains throughout the day. After opening higher, the
Markets inched up further and formed its intraday high of 7905.95 in the mid
session. Overall, though the Markets continued to trade in sideways trajectory
in 30-odd points range, it did successfully capitalize on its gains and
maintained them all throughout. The Markets saw itself coming off its high a
bit while it formed intraday low of 7856.95 but continued to remain in strong
trajectory. It finally ended the day at 7879.40, posting a decent gain of 99.70
points or 1.28% while forming a higher top and higher bottom on the Daily Bar
Charts.
MARKET TREND FOR TUESDAY, OCTOBER 21, 2014
The Markets have created a gap as evident from the Daily
Charts and have also resisted to its 50-DMA levels. Expect the Markets to open
on a modestly positive note and continued with its up move. However, the levels
of 50-DMA would continue to act as resistance and in event of any weakness we
might see the Markets trading in a range with the levels of 7800-7820 acting as
supports once again.
The levels of 7925 and 7970 would act as resistance and the
levels of 7800-20 levels would now once again continue to act as supports.
The RSI—Relative Strength Index on the Daily Chart is
47.4600 and it remains neutral as it shows no bullish or bearish divergences or
failure swing. The Daily MACD continues to remain bearish as it trades below
its signal line. On Candles, A rising window occurred (where the top of the previous shadow is
below the bottom of the current shadow).
This usually implies a continuation of a bullish trend. There have been 9 rising windows in
the last 50 candles--this makes the current rising window even more
bullish.
On the derivative front, the NIFTY October
futures have added over 5.86 lakh shares in Open Interest. This is enough
indication that the Markets have not seen any short covering which would have
otherwise resulted in decline of OI. This can certainly help the Markets and
aid it its advance on the upside.
Referring to the pattern analysis, the
Markets today opened, traded and ended the day above its resistance levels of
7800-20 levels. Now this resistance, when surpassed would act as its support
once again. On the upside, the Markets might face modest resistance at it
50-DMA levels. Until this level is breached on the upside, we can expect the
Markets to trade in a range with the levels of 7800-20 acting once again as
support.
Overall, it is likely that the Markets consolidate
before attempting a fresh up move. While the Markets do so, we would also see
sector rotation taking place and the current laggards like IT might remain in
bit of limelight. It would be extremely imperative to stick to quality stocks
and therefore, very selective approach with 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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