MARKET REPORT September
09, 2014
Today was the day of consolidation for the Markets as it
hovered in the negative territory and did not give a clear breakout and ended
the day with modest losses. The Markets opened on a quiet note as expected but
kept drifting gradually during the day. It remained in negative territory and
while it kept drifting, it went on to form the day’s low of 8126.50 in the late
afternoon trade. There was no serious pressure on the downside not there was
any volatility that was expected. However, in the second half of the session,
the Markets did saw some recovery as the Markets recovered some of its losses
from the low point of the day. However, with the overall volumes remaining
stagnant, the Markets finally managed to end the day at 8152.95, posting a net
loss of 20.95 points or 0.26% while forming a slightly lower top and lower
bottom on the Daily High Bar Charts.
MARKET TREND FOR WEDNESDAY, SEPTEMBER 10, 2014
The Markets currently remain in completely indecisive state
as it has shown a mild throwback while attempting a breakout from the rising
trend line. Tomorrow as well, such dilemma of the Markets is likely to remain
evident. The Markets are expected to open again on a quiet note but to continue
and confirm the breakout the Markets will have to move past its previous high
with good participation and on the other hand will have to trade above 8120-25
levels to avoid any weakness from creeping in.
The levels of 8175-80 and 8215 would act as immediate resistance
levels. Though on the higher side, the Markets would be trading in uncharted
territory. On the downside, the levels of 8120 and 8040 are likely to act as
supports.
The RSI—Relative Strength Index on the Daily Chart is
72.3130 and it is neutral as it shows no bullish or bearish divergence or any
failure swings. The Daily MACD continues
to remain bullish as it trades above its signal line.
On the derivative front, NIFTY September futures have shed
over 6.59 lakh shares or 4.17% in Open Interest. This, so far as standalone
figures go, clearly indicates shedding of open positions / unwinding at higher levels.
Returning to pattern
analysis, the Markets have attempted to breakout of the rising trend line as
evident from the Daily Chart. However, instead of giving a clear breakout, it
has shown a mild throwback. However, in order to achieve a clear breakout, it
will have to move past its previous high with high volumes and stay above that.
However, it is also important to note at this juncture that the Markets are
trading “overbought” on the Daily Charts and this may pause a question on the
validity of the breakout or the attempt of such breakout.
Overall, with clear and convincing breakout yet to happen,
in the event of the Markets breaching the levels of 8120-25, there are chances
that the Markets return back within the broad formation. Even if it breaks out
higher, the overbought nature of the Markets would make things difficult on the
higher side as well. Such circumstances call of very high degree of caution on
the upside and the profits should be very vigilantly protected. Overall, while remaining
light on overall exposure, continuing cautious approach is advised.
Milan Vaishnav,
Consulting Technical Analyst,
+91-98250-16331
