MARKET REPORT February
10, 2015
Heavy bearish undertone continued to weigh on the Markets as
the Markets ended the day with a deep cut and ended with losses for the seventh
day in a row. The sentiments was affected with the possible BJP defeat in Delhi
polls and also the weaker than expected Q3 earnings from the key companies. The
Markets saw a gap down opening as it opened with a wide gap compared to its
previous close. Post such gap down opening, the Markets showed no inclination
to recover at any point of the day. After trading sideways with opening losses,
the Markets drifted further in the second half of the session as it formed its
intraday low of 8516.35. No signs of recovery was seen and the Markets finally
ended the day at 8526.35, posting a net loss of 134.70 points or 1.56% while
forming a sharply lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR TUESDAY, FEBRUARY 10, 2015
Markets are likely to remain in little tough spot and we can
expect a modestly lower opening today. Most of the Delhi Poll outcome has
discounted and with the Markets expected to open lower, it would also attempt
to find some stability and attempt to form some
bottom with the levels of 50-DMA continuing to act as important support.
The levels of 8605 and 8640 will act as resistance on the
upside and the levels of 8450 will act as important support for the Markets.
The RSI—Relative Strength
Index on the Daily Chart is 45.2858 and it has reached its lowest value in last
14-days which is bearish. However, it does not show any bullish or bearish
divergence. The Daily MACD continues to remain bearish trading below its signal
line. On the Candles, A falling window occurred (where the
bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a
bearish trend.
The two candles preceding
the falling window were black, which makes this pattern even more
bearish.
On the derivative front,
the NIFTY February futures have shed over 1.58 lakh shares or 0.64% in Open
Interest. This figures is relatively smaller looking at the extent of decline
in the previous session. At the same time, selling in the Cash Markets have
been observed where as Stock futures have been adding large amount of Open
Interest in the previous session.
Taking a cue from pattern
analysis, the Markets opened below its important support level of 8640 and
declined further from there. This level, on the upside will now act as
important. The Markets will remain in intermediate corrective trend until it
moves past the level of 8640 on the upside. In event of the Markets continuing
with its downtrend, the levels of 50-DMA might be tested. Even if this happens,
the Markets will continue with keep its secular trend intact.
Overall, the approach to
the Markets warrants heavy caution. It is widely accepted that the outcome of
the Delhi polls, even if it does not favour the BJP, will not affect the
functioning of the Government at the Centre. It will also not affect the
ability of the Government to execute reforms or its stability in the near term
but it will certainly affect the sentiments and that is what it is doing
currently. However, it will attempt to find bottom after negative opening
today. Refraining from aggressive positions is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
Af. Member: Market Technicians Association (MTA), USA
Af. Member: Association of Technical Market Analysts, INDIA
www.MyMoneyPlant.co.in
+91-98250-16331
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