Market Wrap: 14 January 2016

by Prateek Mazumder on Market Analysis, Market Wrap


“Bulls Make Money, Bears Make Money, Pigs Get Slaughtered” 

-An old say in markets which is very apparent in the current market scenario.



Benchmark Nifty is in midst of some wild swings. The index seems to be struggling to save the psychological 7500 mark and getting beaten down by the 7580-7600 resistance every single time. A wide opening gap down had led to a sharp intra-day rally but the sentiments are still strongly negative and any spec of hope is getting extinguished with brutality.

What  has kept the market afloat today is the Infosys quarterly results and the sharp rally in the stock. It was trading at 6 %  higher mid day but it also gave into the pressure and lost the day’s high closing some 20-30 points off the high.

Essentially everything is suggesting it is a bad time for Nifty and the beta stocks.

In the past 2 weeks i.e. 10 trading sessions , the index has given away over 400 points one way without much of a support from any kind of buyers. There has been limited consolidation but comprising of violent swings which threaten the market participant’s confidence. The trend is down and the momentum is suggesting further weakness.

The hourly chart suggests the fact that the index is trying hard not to correct further. Every dip below 7500, has led to a sharp bounce back. A move above 7600 will bring forth some breath of relief, but only  sustenance  above 7700 will bring forth confident buying and relief. Adding to the misery is RSI indicator which is also struggling to pass above the important level of 50. On the flip side, a break below the current 2-day lows (7430-7440) will lead to further weakness.


Chart of the Day



Since we have already spoken about INFOSYS in our segment Wow ! What a Chart (link  here) Lets discuss LUPIN and a Japanese candle sticks pattern called the Bullish Engulfing.

Bullish Englufing is a bullish japanese candle stick pattern which depicts the literal engulfing of the previous day’s candle and it is a carrier of good news. Now you may think this sounds very contradicting given our weak views on nifty, however pharmaceutical  is a defensive sector, this means it does not have a high beta relation to the Index. Thus , given the occurance of this pattern on the chart, we can expect to see some greenery tomorrow.





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