MARKET REPORT October
16, 2014
We had expressed in our analysis that if the Markets
breaches the 7800-20 support zone, it is likely that it would test its 100-DMA
levels. Today, the Markets did test its 100-DMA levels as it saw a rapid
sell-off in the second half of the session and ended the day with losses while
tracking global weakness. The Markets opened on a modestly positive note and
formed its intraday high of 7893.90 in the very early minutes of the trade.
However, post opening and trading on a
positive note in the morning, the Markets soon pared its morning gains to trade
flat. Thereafter, for the most part of the first half of the trading session,
the Markets traded sideways in a much capped range. However, the second half of
the session saw a sharp sell-off and the Markets pared its retraced very
rapidly. It came off nearly 160+points from its intraday high, and went on to
form the day’s low of 7729.65. It finally settled the day at 7748.20, posting a
net loss of 115.80 points or 1.47% while forming a lower top and lower bottom
on the Daily High Low Charts.
MARKET TREND FOR FRIDAY, OCTOBER 17, 2014
As evident from the Daily Chart, the Markets have taken
support at its 100-DMA levels and these levels are expected to hold as support in
the near term. Expect the Markets to
open on a positive note and register some gains in the initial trade as the
global markets are currently off their intraday lows and our domestic charts
too show a clear possibility of the Markets showing a technical pullback and
the levels of 100-DMA holding out as support in the near term.
The levels of 7820 and 7865 would act as immediate
resistance and the levels of 7735 and 7700 would act as immediate supports.
The RSI—Relative Strength Index on the Daily Chart is
37.1683 and it has reached its lowest value in last 14-days which is bearish.
However, it does not show any bullish or bearish divergence. The Daily MACD
remains bearish while trading below its signal line.
On the derivative front, NIFTY October futures have shed
over 2.77 lakh shares or 1.89% in Open Interest indicating unwinding of long
positions in the Markets.
Returning to pattern analysis, we have often mentioned that
the Markets have formed an immediate top of 8180 and this would continue to act
as immediate top. Following that formation, the Markets have retraced nearly 432
points NIFTY. It now trades below its 50-DMA and has taken support at its
100-DMA levels and these levels are expected to hold as support levels in the
immediate short term.
Overall, there are bright chances that the Markets, that
reacted badly to global weakness, attempts to find support at the levels of
100-DMA and attempts a technical pullback. Though caution at any stage cannot
be ruled out, bargain hunting and selective purchases can certainly be
initiated. Action would remain limited to selective quality stocks and right
picking can set to return equally quality gains in the near term. While
continuing to remain selective, cautious optimism is advised for the day.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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