Friday, February 6, 2015

Daily Market Trend Guide -- Friday, February 06, 2015

MARKET REPORT                                                                              February 06, 2015
The Markets ended with losses for the fifth day in a row as it pared more than 152-odd points from the high point of the day and ended the day with modest losses. The Markets saw a stable and quiet opening on expected lines and traded sideways in the first half of the session in a very narrow and capped range. The afternoon trade saw some more strength coming in as the Markets saw a sharp up move wherein it marked the levels of 8838.45 as intraday high. However, adverse news flow from Europe over Greece crisis played the spoil sport with anyway weak technical indicators. The Markets saw a equally sharp decline wherein it not only pared all of its robust gains but further dipped into negative as it formed its intraday low of 8683.65 coming off nearly 152-odd points from the high point of the day. It finally settled the day at 8711.70, posting a modest loss of 12 points or 0.14% while forming a higher top but lower bottom on the Daily Charts.

MARKET REPORT FOR FRIDAY, FEBRUARY 06, 2015
The Markets have remained dominated with volatile movement on either side and it is likely to remain this way for some more time. Expect a quiet opening in the Markets but the Markets are likely to trade with downside bias for some more time while it attempts to find a bottom through mild pullbacks which we can certainly expect. The level of 8830 will act as intermediate resistance in the immediate short term.

The levels of 8830 and 8875 will act as resistance and the level of 8640 will continue to act as immediate support for the Markets.

The RSI—Relative Strength Index on the Daily Chart is 57.6199 and it has reached its lowest value in last 14-days which is bearish. Further Bearish Divergence is also seen as the RSI has set a fresh 14-day low whereas the NIFTY has not yet done so. As we had mentioned in our yesterday’s edition of Daily Market Trend Guide, the Daily MACD has reported a negative crossover and now trade below its signal line and is now bearish.

On derivative front, the NIFTY February future have shed over 4.46 lakh shares or 1.77% in Open Interest. This signifies unwinding of long positions from higher levels.
Returning to pattern analysis, as we have often mentioned in our previous editions of Daily Market Trend Guide, that even if the Markets tests the levels of 8640, there will be no significant breach of any type on the  Daily Charts. However, there are chances that the Markets now attempts to find bottom and halts its corrective activity in the near term. However, volatility will continue to remain ingrained in the day to come.

The Markets are now trading near its short term, but important support levels of 8640. While it is likely that the Markets will test these levels, at the same time, it is also likely to show intermittent pullbacks as well. In view of this, it is advised to continue to adopt highly stock specific approach and also continue to keep exposures at moderate levels.

Milan Vaishnav,
Consulting Technical Analyst,
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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