Wednesday, October 15, 2014

Daily Market Trend Guide -- Thursday, October 16, 2014

MARKET REPORT                                                                                 October 14, 2014
The Markets had a very volatile session on Tuesday wherein it moved in either direction and traded in a broad trading range while holding to its important supports  and resisting to its 50-DMA as well on the upper side and ending with modest losses. The Markets saw a positive opening but formed its intraday high of 7928 in the very early minutes of the trade. The Markets thereafter soon pared its gains to trade sideways on a flat note. The late morning trade saw a sharp sell-off again from those levels as the Markets rapidly lost ground to form the day’s low of 7825.45 losing nearly 100-odd points from its day’s high. However, the levels of 7800-20 zone continued to act as supports as the Markets recovered from the lows of the day. It recouped all of its losses and also went into positive territory for a very brief time. Finally the Markets settled the day at 7864, posting a net loss of 20.25 points or 0.26% while forming a slightly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, OCTOBER 16, 2014 

Markets will have a tough day as it will open after a gap of one day due to trading holiday on account of Assembly Elections in Maharashtra. The Markets will struggle between digesting global weakness that existed in the day in between and also positively react to the lower WPI data and possible BJP Victory in the  Maharashtra State Polls. Owning to this, the Markets may see a positive opening and might extend with gains. If any lower opening is registered, it would be knee-jerk reaction to the global weakness and we can certainly see improvement as the day progresses.

The levels of 7920 and 7965 would act as resistance while the levels of 7800-20 levels would act as supports. Any breach below this would take the Markets near its 100-DMA.

The RSI—Relative Strength Index on the Daily Chart is 43.8138 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bearish as it continues to trade below its signal line. 

On the derivative front, NIFTY October futures have shed over 1.07 lakh shares or nominal 0.73% in Open Interest. This shows no major shedding of open interest was observed and the Markets are showing a mixed directional trend.

Referring to trend and pattern analysis the Markets continue to trade below its 50-DMA but above its significant support zone of 7800-20 levels. The Markets will have to trade above these levels in order to avoid any further weakness. Any breach below these levels would take the Markets near its 100-DMA.

Overall, the apart from technical factors and global weakness, the Markets would also react to the positive macro economic data and possible BJP win the State Elections of Maharashtra and Haryana. Owing to these both negative and positive factors we will continue to see volatility ingrained into the session and the Markets are expected to continue to remain volatile in a broad trading range. Highly selective purchases may be made while approaching the Markets with positive caution.

Milan Vaishnav,
Consulting Technical Analyst,
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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