Tuesday, February 24, 2015

Daily Market Trend Guide -- Tuesday, February 24, 2015

MARKET REPORT                                                                                 February 24, 2015
What seemed to be a stable session yesterday took a bearish turn as the Markets reacted to the news of S&P report and issues of file leakages and ended the day with a deep cut. The Markets saw a modestly positive opening and formed the intraday high of 8869 in the early morning trade. Post forming of this level, the Markets traded more or less stable and moved with capped gains in a sideways trajectory on thin volumes. This continued until late afternoon trade as the Markets continued to trade with no directional bias but remained more or less stable. However, it took a bearish turn in the last hour and half of trade. It came off rapidly and dipped into the negative territory. It further went on to form the day’s low of 8736.10 in the final minutes of the trade. No major recovery was seen and it finally ended the day at 8754.95, posting a net loss of 78.65 points or 0.89% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR TUESDAY, FEBRUARY 24, 2015
Today, expect a quiet opening in the Markets. The Markets may open modestly positive or flat and trade in a range. What we saw yesterday was more of a panic  / knee-jerk reaction by the Markets but today, we can see some amount of stability returning in the Markets. There has been no structural breach on the Daily Charts. We have an eventful long week this time with the Markets trading also on Saturday due to Budget. Overall, though no major sell off or breach on Charts may be seen but the Markets would continue to consolidate until Budget.

The levels of 8790 and 8845 would act as immediate resistance levels. The supports would come in at 8985 and 8640 levels.

The RSI—Relative Strength Index on the Daily Chart is 54.4726 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD is bearish after reporting a negative crossover and it now trades below its signal line.

On the derivative front, the NIFTY February futures have shed over 64.12 lakh shares or 27.96% in Open Interest whereas March futures added 60.58 lakh shares or 144.51% in Open Interest as rollover took place.

While taking a look at pattern analysis, as mentioned before, there is no structural breach on the Charts after yesterday’s decline in the Markets. It has kept its overall trend intact and continues to trade above its key support levels. However, given the technical indicators and the major events coming up this week, we will continue to see the Markets trading in a broad range.

All and all, though no major flipside expected one needs to be cautious as approach the Budget. By the time we approach this event, we can certainly expect volatility to remain ingrained in the Markets. Purchases should be kept very limited and selective while maintaining cautious outlook for the day.

Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member:
Association of Technical Market Analysts, INDIA


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