Wednesday, November 26, 2014

Daily Market Trend Guide -- Thursday, November 27, 2014

MARKET REPORT                                                                     November 26, 2014
The Markets had a volatile session which is usually typical of rollover activities as it swung on either side before ending the day with nominal gains. The Markets saw a very quiet and flat opening. However, after opening on a quite note, the Markets slipped gradually in the morning trade to form the day’s low of 8438.65. It did not breach this level and spent the first half of the session in a ranged movement. It was in the second half when the Markets recouped its losses and managed to trade flat again. It saw further strength coming in as it went on to post the day’s high of 8500.30 recovering nearly 60+points from its intraday low. The last hour of the trade saw some paring of gains again from the day’s high point. The Markets finally ended the day at 8475.75, posting a nominal gain of 12.65 points or 0.15% while forming a lower top but slightly higher bottom on the Daily Bar Charts.


MARKET TREND FOR THURSDAY, NOVEMBER 27, 2014

Analysis remains more or less on similar lines once again as the Markets fiercely continue to consolidate above the rising trend line which is evident on the Daily Charts. We can once again expect a very quiet opening in the Markets and the levels of 8440 would remain critical levels for the Markets. It would be important and necessary for the Markets to trade above this level in order to avoid any weakness creeping in.

The levels of 8500 and 8535 acts as immediate resistance and the levels of 8440 and 8310 would act as immediate supports.

The RSI—Relative Strength Index on the Daily Chart is 67.6774 and it is neutral as it shows no bullish or bearish divergence or any failure swing. The Daily MACD remains bullish as it trades above it signal line. However, if the Markets continue to consolidate without registering any significant gains, we may see Daily MACD posting a negative crossover.

On the derivative front, NIFTY and Marketwide rollovers continued which remained above its 3-month series average. The NIFTY November futures shed over 36.29 lakh shares or 27.82% in Open Interest whereas the December series added over 44.96 lakh shares or 38.28% in Open Interest.

Going by the pattern analysis, the Markets have been fiercely consolidating along the rising trend line as very much evident on the Daily Chart. On the Weekly Charts, this translate into a distinct broadening formation and it would be very necessary for the Markets to give a clear breakout in coming days. Failure to do so would invite some short term weakness in the Markets. The level of 8440 would remain important as any dip below this level will induce some short term weakness in the Markets.

Overall, we reiterate our view to curtail over exposure in the Markets. Any purchases, as we have been maintaining in our previous editions, should be extremely stock specific. The session is also likely to remain dominated with rollover centric activities. While continuing to protect profits at higher levels, cautious outlook 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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