Daily Market Trend Guide -- Tuesday, January 06, 2015

MARKET REPORT                                                                          January 06, 2015

The Markets remained in corrective mode today after Friday’s buoyant move as it ended the day with minor losses after a volatile session. Disregarding global cues, the Markets saw a positive and better than expected opening. It put on some more strength as it formed the day’s high of 8445.60 in the late morning trade. However, after this point, the Markets changed its trajectory. It pared some of its gains initially but then converted itself into a falling trajectory. It kept losing ground gradually as pared its morning gains to dip into negative. It went on to form the day’s low of 8363.90, coming off nearly 80-odd points from the high point of the day. Some minor recovery was seen in the final minutes of the trade, the Markets finally ended the day at 8378.40, posting a net loss of 17.05 points or 0.20% but still continued to form a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, JANUARY 06, 2015

There are chances that the Markets continue to display its consolidation mood and therefore we can expect a quiet opening to the trade. Post opening, the Markets are likely to trade in a capped range with the levels of 50-DMA continuing to act as major and important support.

The intraday trajectory and the volumes would be critical to decide the trend for the given session.

The levels of 8410 and 8445 would act as immediate supports. The levels of 8320 would act as important support at Close levels.

The RSI—Relative Strength Index on the Daily Chart is 56.3259 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it trades above its signal line.

On the derivative front, the NIFTY January futures have shed over 7.29 lakh shares or 3.40 in Open Interest. This shows some amount of profit taking was done from the higher levels.

Going by pattern analysis, the trend continues to remain intact. However, after the Markets moved past the levels of 50-DMA it is now showing some tendency to consolidate and it is likely that it consolidates for a brief period before it continues with its up move again. However, the most important thing to watch out for is that the Markets will have to remain above 50-DMA to avoid any further weakness from creeping in.

Overall, the Markets consolidated today after Friday’s strong up move. It would be important for the Markets to maintain itself above the 50-DMA levels to avoid any short term weakness. So long as the Markets trade above this level, we can safely presume that the Markets are likely to continue with its up move. Stock specific approach with 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

http://milan-vaishnav.blogspot.com

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