Tuesday, September 9, 2014

Daily Market Trend Guide -- Wednesday, September 10, 2014

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


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