Tuesday, November 25, 2014

Daily Market Trend Guide -- Wednesday, November 26, 2014

MARKET REPORT                                                                              November 25, 2014
The Markets saw some correction setting in after opening levels as it ended the day with modest losses. The Markets saw a quiet and sedate opening but after opening flat to modestly negative, it settled itself in the negative territory. For the entire session, the Markets never really traded positive even once. Once slipped into negative territory post opening, it kept itself in falling trajectory for the entire session. It kept losing ground gradually and in the late afternoon trade, went on to form the day’s low of 8429.45. The Markets briefly traded around these levels but it also saw some minor recovery towards the end. It finally settled the day at 8463.10, posting a net loss of 67.05 points or 0.79% while forming a similar top and lower bottom on the Daily Bar Charts. 

MARKET TREND FOR WEDNESDAY, NOVEMBER 26, 2014

The Markets are again poised at a critical juncture and the opening of the Markets would be very critical to decide the trend for immediate short term. The Markets have attempted a breakout and have closed just above its rising trend line. The Markets may see a modestly positive opening. It would be critically important for the Markets to open and trade above 8430. Any dip below 8430 can induce short term weakness in the Markets.

The levels of 8450 and 8475 can act as resistance. Supports come in at 8430 and further down at 8310 levels.

The RSI—Relative Strength Index on the Daily Chart is 66.9430 and it has just crossed below from a topping formation. It has also reached its lowest value in last 14-days which is bearish. Further, the RSI has made a fresh 14-period low but NIFTY has not yet and this is Bearish Divergence. The Daily MACD still maintains its bullish condition while trading above its signal line.

On the derivative front, NIFTY November futures shed over 58.59 lakh shares or 30.99% in Open Interest while December futures have added 56.88 lakh shares or 93.93% in Open Interest. This being the expiry week, rollovers were clearly seen in NIFTY and stocks.
Going by the pattern analysis, the Markets have attempted a break out but has not yet confirmed it. Trading above the levels of 8430 would be critically important for the Markets. 

Even if the Markets see a up move and sees some selling pressure again, it would be really important for the Markets to trade above 8430 levels. Any dip below 8430 levels can induce short term weakness in the Markets.

Overall, the lead indicators suggest that the Markets may continue to see some selling pressure from higher levels. Given this reading, it is advised to refrain from any aggressive positions. Extensive exposures should be avoided and existing profits should be vigilantly protected. While maintaining adequate liquidity and cash, cautious outlook 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
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