MARKET REPORT January
09, 2014
The Markets ended its four day losing streak and ended the
day with minor gains yesterday in a session which was range bound with low
volumes. The Markets opened on a positive note and spent the first half of the
session with modest gains. The Markets traded sideways until afternoon but gave
up its gains to trade flat in the late afternoon trade. However, it managed to
recover from its lower levels again and went on to give the day’s high of
6192.10. It resisted to its 50-DMA and amid low volumes pared those gains
again. However, it managed to end the day at 6174.60, posting a net gain of
12.35 points or 0.20% while forming a lower top but higher bottom on the Daily
High Low Charts.
MARKET TREND FOR TODAY
Today’s analysis again remains more or less on similar lines
as that of yesterday. The Markets have attempted to find its bottom but has
continued to resist at its 50-DMA levels. Today, we can expect a flat opening
and it would be critical to see if the Markets manage to move past their 50-DMA
level which is 6195.82 today.
Today, the levels of 6195 and 6240 are immediate resistance
on the Daily Charts. The supports come in at 6150 and 6115 levels.
The RSI—Relative Strength Index on the Daily Chart is
45.4912 and it remains neutral today with no bullish or bearish divergences or
any kind of failure swing. The Daily MACD continues to trade below its signal
line.
On the derivative front, NIFTY January futures have shed
over 4.48 lakh shares or 2.53% in Open Interest. This signifies that there has
been some short covering at the lower levels. As we just mentioned above, the
Markets have attempted to find its bottom and it would be crucial to see if we
see fresh long positions being taken.
Going by the pattern analysis, the Markets have resisted at
its 50-DMA yesterday amid low volumes. Therefore, it would be critical to see
if the Markets manage to move past that level today. Until the Markets manages
to move past the levels of 50-DMA and close above that, we will not see any
sustainable up move and we would also see temporary weakness persisting in the
Markets.
All and all, the opening levels and the intraday trajectory
that the Markets form would be crucial and the behaviour vis-à-vis the levels
of 50-DMA at Close would be important. It would be necessary for the Markets to
move past this level in order to avoid any weakness persisting and to resume
its up move. Until this happens, it is advised to continue to remain very stock
specific and maintain liquidity by avoiding over-exposure in the Markets to
protect open positions. Overall, like
yesterday, continuance of positive caution is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
