Monday, February 2, 2015

Daily Market Trend Guide -- Tuesday, February 03, 2015

MARKET REPORT                                                                      February 03, 2015
Markets saw a very volatile session but in the end settled the day with minor losses ahead of RBI Credit Policy review. The Markets saw a modestly negative opening and traded with capped losses in the morning trade. It weakened further in the afternoon trade as it formed its intraday low of 8751.10. The Markets continued to spend some time in sideways trajectory and the second half of the Markets saw some sharp recovery. It saw a near parabolic rise as it not only went into the positive territory but also formed its day’s high of 8840.80. It rose nearly 90-odd points from the low point of the day. However, volatility refused to go away and the Markets retraced some of these gains. It finally settled the day at 8797.40, posting a minor loss of 11.50 points or 0.13% while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR TUESDAY, FEBRUARY 03, 2015
The Markets have chosen to consolidate on Close levels. We can expect a quiet opening to the session and the Markets would react to the RBI Credit Policy review coming up. The opening trade is likely to see ranged movement but the  Markets would give some knee-jerk reactions to the RBI inputs. Though any immediate rate cut is discounted by the Markets but the any cut would trigger a positive surprise.

The levels of 8850 and 8925 would act as immediate resistance to the Markets. The supports would come in at 8750 and 8670 levels.

The RSI—Relative Strength Index on the Daily Chart is 64.0535 and it remains neutral without showing any bullish or bearish divergences or failure swings. The Daily MACD continues to remain bullish trading above its signal line.

On the derivative front, the NIFTY February futures have shed over 5.36 lakh shares or 2.10% in Open Interest. This very clearly suggests that the pullback that we saw in the previous session was purely on account of short covering from lower levels.

Coming to pattern analysis, as mentioned in earlier editions, the Markets have formed an immediate top of 8985 levels and have seen correction. It resisted to a rising trend line and in the process this rising trend line continues to remain an extended resistance for the Markets. Any up move, shall occur only after Markets moves past 8985-95 levels after a proper and fresh area pattern. Until this happens, we would continue to see a broad ranged consolidation in the Markets.

Overall, the Markets are going to remain volatile with some negative bias. Positive trigger would come in for the short term only with the RBI cutting rate again but this remains discounted to a much larger extent by the Markets as no cut is expected. Speaking purely on technical terms, the Markets would continue to consolidate with mild downward bias. It is continued to adopt a cautious outlook 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
+91-98250-16331

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.