MARKET REPORT October
21, 2014
The Markets witnessed quite volatile session as it swung
back and forth in 60-odd points day but ended the day with modest gains while
continuing to resist to its 50-DMA. The Markets did open positive on expected
lines and gained further strength post positive opening. The Markets formed its
intraday high of 7936.60 in the first half of the session. However, the 50-DMA
did resist on the upside as the Markets pared nearly all of its gains by
afternoon trade after reacting from the day’s high. However, it saw some
strength coming back as it again recovered all of lost intraday gains and went
back to trade near the high point of the day. The Markets spent the last hour
of the trade trading in a capped range and finally ended the day at 7927.75,
posting a modest gain of 48.35 points or 0.61% while forming higher top and
higher bottom on the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, OCTOBER 22, 2014
As evident from the Charts, the Markets have closed at its
50-DMA levels and have resisted there at the Close levels. However, given the
overall structure of the Charts, the Markets are likely to open on a positive
note and therefore likely to open and trade above its 50-DMA levels. It would
be important for the Markets to move past this level and failing which the
Markets would continue to trade in a capped range in volatile manner.
The levels of 7927.91 (50-DMA) would act as resistance if
the Markets opens below this. However, with chances of positive opening this
level is likely to act as support. Overall resistance and supports are 7975 and
7850 respectively.
The RSI—Relative Strength Index on the Daily Chart is
50.7194 and it has reached the highest value in last 14-days which is bullish.
Further, the RSI has set a new 14-period high whereas NIFTY has not yet and
this is Bullish Divergence. The Daily MACD, though it remains negative while
trading below its signal line, it likely to give positive crossover in coming
days if the Markets do not see major declines and managed to trade at least in a
range.
On the derivative front, the NIFTY October futures have
further added over 5.57 lakh shares or 3.44% in Open Interest. This signifies
creation of further long positions and this is likely to keep the Markets in motion.
Going by pattern analysis, the Markets are currently in
broad trading range. The Markets took support on 100-DMA twice and now
currently trades above its important pattern support of 7800-20 and 100-DMA
acting as its supports and the levels of 50-DMA acting as its immediate
resistance. With the Markets closing very near to its 50-DMA, it is likely to
move past that level as well. In that case we can see some more up tick coming
in. Failing this, the Markets would continue to remain in broad trading range.
Overall, it is advised to continue to remain selective in
fresh purchases. In event of any bounce on the upside, it should be used to
exiting long positions. Any up move should be first utilised for protecting
profits in existing positions and then on making fresh selective purchases in the
laggards. Overall, with the general bias remaining on the upside, cautious
optimism 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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