MARKET REPORT June
04, 2015
Contrary to what was expected
yesterday, the Markets continued to show
weakness as it ended yet another day with losses after opening on a flat note.
This time, the stocks whose promoter pledging was extremely high and who had
debts in multiple of their market cap bore severe burnt along with general
weakness that prevailed in the Markets. The Markets opened on a flat note and
soon slipped into negative territory in the initial trade. After trading with capped
losses in the morning trade, the Markets saw selling pressure intensifying in
the afternoon trade and at one point of time the Markets went on to form the
day’s low of 8094.15 slipping below the psychological 8100-mark. It was in the last
hour of the trade that the Markets saw some recovery coming in form of some
buying as well as some short covering. Markets saw some 60-odd point recovery
but it finally settled the day at 8135.10, posting a net loss of 101.35 points
or 1.23% while forming a lower top and lower bottom on the Daily Bar Charts.
MARKET TREND FOR THURSDAY,
JUNE 04, 2015
Today, expect the Markets to open
on a modestly positive note and look for directions. We can expect some
stability to return in the Markets after two days of volatile declines and
expect at least a technical pullback in the initial trade. However, as of now,
the Markets trade significantly below its 200-DMA and therefore, this level will
continue to act as resistance in coming days. The Markets, as of today, has
failed to confirm its reversal on the Daily Charts.
For today, the levels of 8190 and
8240 will act as immediate resistance whereas the levels of 8090 and 8020 will
act as immediate supports.
The RSI—Relative Strength Index on
the Daily Chart is 38.8160 and reached its lowest value in last 14-days which
is bearish. However, it does not show any bullish or bearish divergence. The Daily
MACD has reported a negative crossover and it now trades below its signal line.
On the derivative front, the NIFTY
June futures have shed 86,050 shares or 0.5% in Open Interest. Though this
figure remains insignificant and small, it certainly indicates that there has
been some short covering that took place in the final hour of the trade yesterday.
Taking a cue from pattern analysis,
the Markets now trades below all of its moving averages and therefore the
intermediate trend remains moderately bearish. There will not be any trend
reversal from the lows it posted on May7th unless the Markets moves past its
moving averages forming a higher bottom. Until this happens, the Markets will
continue to trade in a broad 300-odd
points trading range with quite good amount of volatility and with moderately
downward bias.
All and all, today, we can fairly
expect a technical pullback in the initial trade. However, as it happened in the
past, merely short covering will not sustain an pullback and it will have to be
replace with delivery based buying. Minor purchases can be made at these
levels. Overall, while the Markets attempt to find its bottom, highly stock
specific and selective 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
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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