Sunday, September 28, 2014

Daily Market Trend Guide -- Monday, September 29, 2014

MARKET REPORT                                                                           September 26, 2014
The Markets had a terribly volatile session on Friday wherein it succumbed to selling pressure in the first half of the session but recovered and ended the day with gains on back of S&P upgrading India’s sovereign rating to stable. The Markets opened on a mildly negative note and after initially trading in the negative surged to trade with modest gains. However, the Markets witnessed selling pressure returning after that and by mid afternoon trade had came off nearly 100-odd points from its initial intraday high to touch day’s low of 7841.80. However, it saw a sharp turnaround in reaction to  S&P’s rating upgrade and the Markets literally reversed all of its direction. It rose some 140+ odd points from its intraday low of 7841.80. It went on to post day’s high of 7993.30. It finally ended the day at 7968.85, posting a net gain of 57 points or 0.72% while still forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR MONDAY, SEPTEMBER 29, 2014

Expect the Markets to open on a flat to mildly positive note and continue with its up move. Over and above technical possibilities of the Markets continuing to pullback, it has held on to its support of 50-DMA at Close levels. The intraday trajectory of the Markets and close above the levels of 7885 would be important in order to avoid any further weakness from creeping in. However, volatility and some more corrective pressure at higher levels cannot be ruled out.

The levels of 8010 and 8040 would act as immediate resistance and the levels of 7885 and 7818 would act as supports.

The RSI—Relative Strength Index on the Daily Chart is 48.6387 and it remains neutral as it shows no bullish or bearish divergences or failure swings. The Daily MACD still continues to trade bearish, below its signal line. On the Weekly Charts, the RSI is 66.2126 and it has just crossed below from a topping formation which is bearish. The Weekly MACD has reported a negative crossover and is now bearish as it trades below its signal line. 

On derivative front, the NIFTY October futures have added over 6.30 lakh shares or 4% in Open Interest. This shows that apart from sharp short covering from lower levels, some fresh addition of longs too have been reported.

Returning again to pattern analysis, the Markets have so far held on to two things. One, resisting at upper boundary line of the broadening formation and second, the levels of 50-DMA at Close on the downs side. In the coming week, the Markets will more or less remain in range and are not likely to give a runaway rise or any steep downfall as such as well. The overall activities would remain in a broad trading range with good amount of volatility ingrained in it.

Overall, reading the Weekly Chart as well, the Markets have formed an immediate top and so long as it maintains a Close above the levels of 7885, it would continue to remain in trading range.  However, with no structural breach on the Charts, shorts too should be avoided and on the other hand all profits should be protected at higher levels. While continuing to remain selective, cautious outlook is continued to be advised.

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

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