Thursday, November 27, 2014

Daily Market Trend Guide -- Friday, November 28, 2014

MARKET REPORT                                                                         November 27, 2014
The Markets had a volatile expiry as the Markets moved in either direction before closing just a notch below 8500 levels while registering minor gains. The Markets saw a modestly positive opening and after this saw a range bound trade in the morning session before it slipped into the red. By afternoon trade, the Markets slipped further in to the negative territory while it formed the day’s low of 8456.35. However, it was in the second half of the day when volatility creped in. The Markets saw a sudden spurt from the low point of the day as it not only revered all of its losses from lower levels but also traded in to the positive territory. It further went on to form the day’s high of 8506.75 towards the end of the session. It finally settled the day at 8494.20, posting a minor gain of 18.45 points or 0.22% while forming a mildly higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, NOVEMBER 28, 2014

The Markets continue to heavily consolidate sideways along with rising upper trend line as evident on the Daily Charts and this makes the analysis to continue to remain on similar lines as it was in last couple of sessions. We can again expect a quiet opening in the Markets and it would be important for the Markets to trade above 8440 levels in order to avoid any weakness.

The levels of 8500 and 8540 would act as resistance while the supports would come in at 8440 and further down at 8340 levels.

The RSI—Relative Strength Index on the Daily Chart is 68.7671 and it continues to remain neutral as it shows no bearish or bullish divergences or any kind of failure swing. The Daily MACD continues to remain bullish as it trades above its signal line. However, it has flattened out and may post negative crossover in event of any weakness.

On the derivative front, NIFTY December futures have added over 46.99 lakh shares or 28.94% in Open Interest. It signifies some good amount of fresh long positions created. The rollovers in NIFTY and Stocks have remained above its 3-Month series average.

Going once again by pattern analysis, the Markets is moving across the upper trend line of the broadening formation. The Markets certainly remains at a critical juncture and it will have to continue to maintain levels above of 8430 in order to avoid any weakness creeping in. Any dip below this level would induce some short term weakness in the Markets.

Overall, it is important to understand that the Markets are not completely out of the woods. It has been posting fresh highs but clear breakout is not achieved which is very typically seen in such patterns. Until clear breakout is achieved there are always theoretical chances some correction. There are chances that we might continue to see pressure from higher levels and therefore it is advised to continue with the policy of controlled exposure and caution in the Markets for the day.

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

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