MARKET REPORT November
14, 2014
The Markets continued to consolidate for the 7th
day in a row while it saw a spurt in the final hour of the trade on Friday
while it finished the session with gains. The Markets opened on a modestly
positive note but after opening positive saw itself dipping into the red while
forming the day’s low of 8346.80. It moved back in the positive territory soon
after that in the morning trade but remained in a capped 20-odd points range
throughout the rest of the trading session. It once again pared its gains from
higher levels in the late afternoon trade but saw a very sharp spurt in the
last hour of the trade. It not only recouped its earlier gains but formed a
fresh intraday high of 8400.65. It finally settled the day at 8389.90, posting
a net gain of 32.05 points or 0.38% while forming a slightly lower top but
higher bottom on the Daily Bar Charts.
MARKET TREND FOR
MONDAY, NOVEMBER 17, 2014
Markets have been severely consolidating as very clearly
evident from the Daily Chart and have been trading sideward displaying great
amount of underlying strength. The Markets may again see a quiet opening again
and it is likely to consolidate at higher levels and therefore the overall
analysis would continue to remain on similar lines as the Markets continue to
remain mildly overbought as well.
The levels of 8410 and 8445 would act as immediate
resistance levels and the levels of 8270 and 8215 would continue appear as immediate
supports.
The RSI—Relative Strength Index on the Daily Chart is
72.0093 and it does not show any failure swing. However, the NIFTY has formed a
fresh 14-period high while RSI has not and this is Bearish Divergence. It also
trades in “overbought” territory. The Daily MACD although continues to remain bullish
trading above its signal line. On the Weekly Charts, the Weekly RSI is 71.5658.
It also shows a Bearish Divergence as NIFTY has formed a fresh 14-Week high but
Weekly RSI has not while trading in “overbought” territory as well. Weekly MACD
remains bearish as it trades below its signal line.
On the derivative front, the NIFTY November futures have
shed 2.52 lakh shares or 1.09% in Open Interest.
Going by the pattern analysis, though the Daily Charts shows
a prolonged formation, the Weekly Charts show a very classical Broadening
Formation. With the ever rising upper trend line on both Daily and Weekly
Charts, the Markets are not giving a clear breakout on the upside. As we have
mentioned in our previous editions of Daily Market Trend Guide, such broadening
formations are least useful patterns in achieving breakout as the breakout
levels keep rising every day with the rising upper trend line which clearly
diverges with the lower demand line. Also, the fact that the Markets continue
to remain “overbought” also poses technical chances of the Markets
consolidating at higher levels.
All and all, due to the present technical structure of the
Charts, though the undercurrent remains extremely bullish, the Markets may
continue to consolidate at higher levels. Runaway rise may not be seen because
of the technical reasons mentioned and we may see the Markets forming a fresh
area pattern before it breaks out on the upside. Given this reading, it is
advised to continue to make selective purchases while paying equal or even more
attention to protecting profits at higher levels. Overall, 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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