MARKET REPORT October
07, 2014
Weak technicals and adjustment to global spikes during the
holidays took its toll on the Markets as the Markets ended the day with
somewhat decent correction. The Markets opened on a mildly negative note and
remained negative throughout the session. It formed its intraday high of
7943.05 and mildly drifted further into the red. The Markets continued to trade
with capped losses until afternoon trade. With no evident attempt of recovery
seen, the Markets saw increased pressure in the second half of the session. It
went on to drift further and went on to form the day’s low of 7842.70 slipping
below its 50-DMA levels. Not much recovery was seen from these levels as well
as the Markets finally settled and ended the day at 7852.40, posting a net loss
of 93.15 points or 1.17% while forming a sharply lower top and lower bottom on
the Daily Bar Charts.
MARKET TREND FOR WEDNESDAY, OCTOBER 08, 2014
The Markets have ended below its 50-DMA levels but have
stayed within the filters. Today, expect the Markets to open on a modestly
negative note and trade negative in the initial trade and it is expected to
test the support at the support line shown on the Charts. There are chances
that the Markets attempts to see a technical pullback. However, any slippage
below 7815 levels would cause further intermediate short term weakness in the
Markets.
The levels of 7943 and 7990 would act as immediate
resistance and supports are expected to come in at 7815 and 7750 levels.
The RSI—Relative Strength Index on the Daily Chart is
40.4565 and it has reached its lowest value in last 14-days which is bearish.
However, it does not show any bullish or bearish divergence as such. The Daily
MACD remains bearish while trading below its signal line.
On the Derivative front, NIFTY October futures have added
over 6.31 lakh shares or 4.04% in Open Interest. This shows significant
addition of short positions in the system.
Taking cue from pattern analysis, the Markets tested its
50-DMA levels and ended below it but has remained within its filters. If the
Markets reverts and closing above it again, it would prove a whipsaw and the
Markets would return again to consolidation / trading range. However, any
slippage below 7815 levels would induce further immediate short term weakness
in the Markets.
Overall, there are fair amount of the Markets attempting a
pullback and returning back within the consolidation / trading range. However,
until this happens, exercising caution would be imperative and excessive
leverage should be avoided. Overall exposure should be kept limited and under
control. While continuing with stock specific outlook, positive caution 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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