Wednesday, November 12, 2014

Daily Market Trend Guide -- Thursday, November 13, 2014

MARKET REPORT                                                                                November 12, 2014
Markets touched yet another fresh lifetime highs as it moved passed psychological 8400 mark in the intraday trade. The Markets saw positive opening on expected lines and after opening positive, the Markets kept making gradual highs in the morning trade. It went past the psychological 8400-mark to form the day’s high of 8415.05 in the late morning trade. However, the Markets saw some resistance coming in as it came off its highs. Markets spent the rest of the session in slowly paring of gains as it drifted lower. However, gains were maintained all throughout and the Markets finally ended the day at 8383.30 posting a net gain of 20.65 points or 0.25% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, NOVEMBER 13, 2014

With the Markets fiercely consolidating since last several sessions, the analysis would remain on similar lines. The Markets may see positive opening if at all the sentiments are aided by the better IIP numbers and lowering of inflation but at the same time the overbought nature of the Markets will make it certainly vulnerable to the pressure from higher levels.

The levels of 8415 and 8440 would act as resistance while the levels of  8270 and 8215 levels would continue to act as immediate supports.

The RSI—Relative Strength Index  on the Daily Chart is 73.5657 and it has reached its highest value in last 14-periods which is bullish. However, it does not show any bullish or bearish divergence and it trades in “overbought” territory. The Daily MACD continues to remain bullish trading above its signal line.

On the derivative front, the NIFTY November futures have added over 5.80 lakh shares or 2.5% in Open Interest. These figures suggest fresh longs being created. Such action would resist any downside from higher levels and keep the Markets in consolidation in event of any weakness creeping in from higher levels.

Looking at pattern analysis, the Markets have been fiercely consolidating at higher levels on the upper rising trend line of the broadening formation. Having said this, this can certainly be interpreted as very high resilience levels and display of very strong undercurrent and strength by the Markets. This has certainly upward bias but the overbought nature of the Markets calls for caution at each higher levels.

Overall, keeping in line with the overall analysis over last couple of days, we would keep the analysis on such similar lines. Though undercurrent remains certainly strong and buoyant, the overbought markets call for caution at higher levels. This makes the Markets bit vulnerable at higher levels and makes it prone to sharp profit taking at any time from such higher levels. However, given the strong undercurrent, while protecting profits as usual at higher levels, selective purchases may be made. Continuance of 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

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