Daily Market Trend Guide -- Tuesday, October 28, 2014

MARKET REPORT                                                                                         October 27, 2014

The Markets had a session very much on expected lines as it opened positive but ended the day on a lower note while consolidating after couple of days of gains. The Markets opened positive and in the morning trade itself formed its intraday high of 8064.40. Thereafter, the Markets pared whatever modest gains it had in the morning session to trade absolutely flat. The Markets never made any headway nor did it lose ground until most part of afternoon trade as well as it traded flat and in a extremely capped range. It was only in the late afternoon trade that the Markets pared some of its weight. It slipped litter further and went on to form the day’s low of 7985.65. Markets finally ended the day at 7991.70, posting a nominal loss of 22.85 points or 0.29% while forming a higher top but lower bottom on the Daily Bar Charts.

MARKET TREND FOR Tuesday, 28 October 2014

The Markets are likely to trade on similar lines and we are likely to see a session once again in a capped range with some amount of volatility. The Markets are expected to open flat and look for directions.  There are chances that it might consolidate and also remain dominated with some rollover activities. Though no sharp weakness expected but range bound session cannot be ruled out.

The levels of 8064 and 8090 would act as resistance and the levels of 7946 and 7910 are expected to act as supports.

The RSI—Relative Strength Index on the Daily Chart is 54.3025 and it remains neutral as it shows no bullish or bearish divergence or any kind of failure swing. The Daily MACD remains bullish while trading above its signal line. 

On the derivative front, the NIFTY October futures have shed over 9.94 lakh shares or 5.86% in Open Interest. However, this figure, if read singularly, will not be of much use  as we have expiry coming up and rollovers have already begun.

Going by pattern analysis, the Markets, as mentioned yesterday, continue to remain in broad trading range. Any downside would see the support at its 50-DMA. So long as Markets trade above 50-DMA, it would just consolidate in a capped range with upward bias. Only a dip below its 50-DMA would induce some short term weakness in the Markets.

Overall, until the Markets consolidates and does not show a clear directional bias, it is strongly advised to use any up moves primarily for protecting profits at higher levels. Purchases should be made, but only stock / sector specific with high vigilance at higher levels. Overall, with the Markets likely to have sideways directional bias, only stock specific and cautiously optimistic approach 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

http://milan-vaishnav.blogspot.com

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