Sunday, February 8, 2015

Daily Market Trend Guide -- Monday, February 09, 2015

MARKET REPORT                                                                                      February 09, 2015
Weak technicals continued to keep the Markets in the corrective mode on Friday as well as it ended sixth straight day of looses. Caution ahead of Delhi polls outcome also weighed on the sentiments of the Markets while it ended the day with modest losses. The Markets saw a quiet opening on expected lines and it also traded briefly into the positive in the morning trade. After marking 8726.20 as the intraday high, the Markets gently slipped into the negative in the later morning trade. It overall remained in a downward trajectory. It did made an feeble attempt to recover in the afternoon trade wherein it traded flat after recouping all of its modest losses but weakened again in the late afternoon trade. It went on to form the day’s low of 8645.55 and finally ended the day at 8661.05, posting a modest loss of 50.65 points or 0.58% while forming a lower top and lower bottom on the Daily Bar Charts.


MARKET TREND FOR MONDAY, FEBRUARY 09, 2015
Monday’s session is likely to be a acid test for the Markets. So far, the Markets have been trading precisely as analysed and expected in the previous editions of Daily Market Trend Guide as it did test the levels of 8640. The opening of the Markets would be crucial, which would be quiet as such. The behaviour of the Markets vis-à-vis the levels of 8640 will decide the trend of the Markets in the immediate short term.

The levels of 8710 and 8765 will act as resistance levels for the Markets. The supports would come in at 8640 and 8550 levels.

The RSI—Relative Strength Index on the Daily Chart is 53.8259 and it has reached its lowest value in last 14-days which is bearish. Also, the RSI has formed a fresh 14-period low whereas NIFTY has not yet and this is Bearish Divergence. The Daily MACD remains bearish trading below its signal line. On the Weekly Charts, the Weekly RSI is 63.8525 and it remains neutral showing no failure swings or any bullish or bearish divergence. The Weekly MACD remains bullish trading above its signal line.

On the derivative front, the NIFTY February futures have added over 1.29 lakh shares or 0.52% in Open Interest. This is a moderate change but the importance of this figures is that no unwinding of positions is seen at these levels on Friday.

Taking a cue from pattern analysis, the Markets have tested the levels of 8640 precisely on expected lines. This is a important pattern support for the Markets. It would be crucial for the Markets to maintain levels above 8640 in order to avoid weakness. The behaviour of the Markets vis-à-vis this level would be crucially important in the coming days.

Overall, apart from technical reading, the outcome of the Delhi Polls will also weigh sentimentally for the Markets. The BJP not performing well will not go down well sentimentally with the Markets it will now start doubting the present Government’s actual capability to deliver growth. Keeping all this in view, we are of very clear opinion to keep away from any aggressive stance on either side until Tuesday, when the actual results come out. While keeping overall exposure in absolute control, highly cautious and stock specific approach 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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