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Thursday, February 13, 2014

Daily Market Trend Guide -- Thursday, February 13, 2014

MARKET REPORT February 13, 2014

The Markets inched upwards for the second day in a row but the session visibly remained dominated with caution and lack of conviction as the Markets grew cautious ahead of the December IIP and January CPI data that were slated to come after market hours yesterday. The Markets opened on a positive note and in the morning trade; gradually inched upwards to form the day’s high of 6106.60 in the late morning trade. However, the Markets saw some sluggishness returning and it formed a falling channel thereafter and spent the entire session in that trajectory. It came off from its day’s high but maintained modest gains. It finally ended the day at 6084, posting a net gain of 21.30 points or 0.35% while forming a higher top and higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

The December IIP data and the January CPI data that came in yesterday are more or less in line with the what the Markets expected though the December IIP contracted little bit more at -0.6% as against expectation of -0.1%. The Markets have overall discounted this data and no major reaction to this should be seen. The Markets will open again on a quiet note attempting for find direction. Absence of volumes and conviction are keeping Markets in this condition.

For today, the levels of 6110 and 6150 would act as immediate resistance for the Markets. The supports exist at 6070 and 6045 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 43.3285 and it continues to remain neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to trade below its signal line but is moving towards a positive crossover.

On the derivative front, NIFTY February futures have shed over 3.87 lakh shares or 2.44% in Open Interest. This signifies some short covering in the Markets in yesterday’s session. This is likely to keep the Markets in the consolidation zone for some more time. It would be very important to see if this gets replaced with fresh buying.

The Markets have been inching upwards in past couple of session but the main concern that has remained in this pullback has been the lack of volumes. The low level participation on the days when the Markets are rising reflects the lack of directional bias and lack of consensus. Given this thing, it is likely that the Markets remains in consolidation for some more time. It has major resistance near 6150 levels in form of a pattern resistance as well as 100-DMA. To confirm the reversal of the trend, the Markets will have to move past the levels of 6150 with volumes and conviction.

All and all, while keeping the analysis on the similar lines, we continue to advice to refrain from creating aggressive positions on either side. While protection of profits would be extremely important, purchases may be done very selectively. It is advised to maintain adequate liquidity until the directional bias is achieved while maintaining a positive caution on the Markets.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Wednesday, February 12, 2014

Daily Market Trend Guide -- Wednesday, February 12, 2014

MARKET REPORT February 12, 2014

The Markets continued to have a range bound session wherein it continued to consolidate for the third day in a row while ending the day with minor gains. The Markets opened on a positive note on expected line and in the early minutes of the trade, pared some of its gains to trade flat. The Markets saw some strength coming in the morning trade as it gradually inched upwards to give the day’s high of 6081.85. The seconde half of the day saw the Markets paring these gains again to trade on a flat note. The Markets spent the second half of the session while trading in a extremely capped range. It finally ended the day at 6062.70, posting a minor gain of 9.25 points or 0.15% while forming a similar top and slightly higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

After pulling back from its lows of 5933 levels, the Markets have spent the last three sessions while consolidating in a much capped range. Today, we can expect the Markets to open on a decently positive note and continue with its up move. However, as outlined in our previous editions of Daily Market Trend Guide, it would be important for the Markets to maintain these opening gains and capitalize on it. With December IIP data and January CPI data coming in after Market hours, the Markets are again set to spend the day in a range.

For today, the levels of 6090 and 6145 are immediate resistance levels on the Charts. The supports come in much lower at 6025 and 5980 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 40.3487 and it continues to remain neutral without showing any failure swings or any kind of bullish or bearish divergences. T he Daily MACD trades below its signal line.

On the derivative front, the NIFTY February futures have added over 4.80 lakh shares or 3.11% in Open Interest. This shows that some fresh positions have been added in yesterday’s trade and the Markets are likely to continue with its up move, at least in the initial session.

As mentioned above, the Markets have been consolidating for last three sessions after its pullback. Going by the pattern analysis, the Markets are likely to inch upwards towards its 100-DMA levels and again face some resistance and consolidation. It would confirm its trend reversal only after it moves past its 100-DMA with volumes and good amount of participation.

All and all, it is continued to advise to keep avoiding aggressive positions in the Markets. Heavy exposures should be avoided. Any rise should be used to book profits wherever it exists and making highly selective purchases. Both profits and amount of exposures should be heavily guarded until the directional bias is clearly established. Overall, continuance of positive caution is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331

Tuesday, February 11, 2014

Daily Market Trend Guide -- Tuesday, February 11, 2014

MARKET REPORT February 11, 2014

The Markets had a direction-less session yesterday wherein it spent the entire session heading nowhere in a 20-odd points range and ended the day with marginal losses. The Markets saw a modestly positive opening and formed its intraday high of 6083.05 in the very early minutes of the trade. However, post this opening, the Markets pared its gains in the morning trade and traded flat. Then the entire session was spent in a sideward trajectory in a very narrow range. The markets slipped a bit more toward the end to form the day’s low of 6046.40. It finally ended the day at 6053.45, posting a marginal loss of 9.75 points or 0.16% while forming a similar top and slightly higher bottom on the Daily High Low Charts.

MARKET TREND FOR TODAY

Today, we are once again likely to see a positive opening. The Markets are slated for a modestly positive opening and the analysis for today would remain more or less similar to that of yesterday. It would be necessary for the Markets to remain in positive trajectory failing which it is likely to consolidate again like yesterday on similar lines. Volumes would remain crucial for today as well.

For today, the levels of 6090 and 6140 would act as immediate resistance on the Daily Charts. The supports exist at 6030 and 5975 levels.

The lead indicators continue to remain in place. The RSI—Relative Strength Index on the Daily Chart is 39.0534 and it remains neutral without showing any bullish or bearish divergences or failure swings. The Daily MACD remains bearish as it trades below its signal line but it is moving towards reporting a positive crossover.

On the derivative front, the NIFTY February futures have added 41,650 shares or 0.27% in Open Interest. The Open Interest figures have remained unchanged and this remains a positive sign which signifies that no major offloading has been seen in yesterday’s session.

The Markets have attempted a trend reversal and it is consolidating after its recent pullback from its 200-DMA. To further strengthen this attempt of pullback, it will have to resume its up move and at lest test its 100-DMA levels near 6150, and then move on to confirm the reversal of the trend. During this entire process, the volumes would be very critical. Any up move should be accompanied by volumes in order to sustain at higher levels.

All and all, like yesterday, stock specific actions would continue. It is advised to continue to remain light on the positions at protect profits wherever possible until the directional bias gets clear. Very selective purchases may be made. Overall, cautious optimism is advised for today.

Milan Vaishnav,

Consulting Technical Analyst,

+91-98250-16331