Daily Market Trend Guide -- Friday, July 24, 2015

MARKET REPORT                                                                                              July 24, 2015

Markets traded yesterday precisely on the analysed lines as it not only remained volatile and consolidated but ended the day with a modest losses while continuing to trade within the channel. The Markets saw a quiet and positive opening and formed its intraday high of 8654.75 in the morning trade. The Markets traded briefly in the positive territory and then slipped into the negative zone by afternoon. Markets remained volatile in the afternoon trade as it slipped and recovered but did not maintain the recovery and slipped again. It went on to form the day’s low of 8573.80 by late afternoon trade. Some recovery was seen and the Markets finally ended the day at 8589.80, posting a modest loss of 43.70 points or 0.51% while forming a higher top and higher bottom on the Daily Bar Charts.

MARKET TREND FOR FRIDAY, JULY 24, 2015

Technical indicators clearly suggest the Markets to remain in consolidation in the immediate short term. The Markets are likely to open on a flat to mildly negative note and look for directions. Fresh up moves shall occur only above 8650-8675 levels and the Markets are expected to continue to take support in the channel. The intraday trajectory would be crucial to watch out for and the Markets are also likely to remain somewhat ingrained with volatility.

The levels of 8650 and 8675 will act as immediate resistance for today. The supports come in at 8550 and 8500 levels.

The RSI—Relative Strength Index on the Daily Chart is 60.1949 and it is neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD remains bullish as it continues to trade above its signal line.

On the derivative front, the NIFTY July futures have seen shedding of over 7.52 lakh shares or 3.51% in Open Interest. On other had, August series have seen net addition of over 2.63 lakh shares or 11.51% in OI. Some net short positions have been observed in NIFTY Futures.

Coming to pattern analysis, the Markets are continuing to trade in a channel / trading range drawn from the lows of 8000 levels. As mentioned in our previous editions, the Markets will wait to give a clear breakout because it trades in a rising channel and the upper trend line keeps rising every day taking with itself higher the level which the Markets shall need to move past for a clear breakout. Therefore, until a sharp up move comes, the Markets are likely to continue to trade in a capped and upward rising channel with some amount of volatility ingrained in it.

Overall, with the chances of consolidation continuing at current levels, we continue to reiterate our advice of refraining from heavy long positions. Selective purchases may be made as stock specific action and selective out performance would continue. However, more liquidity should be maintained than taking fresh exposures with high amount of vigil at higher levels.

Milan Vaishnav,
Consulting Technical Analyst

Af. Member: Market Technicians Association, (MTA), USA
Af. Member: Association of Technical Market Analysts, (ATMA), INDIA
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

Consultant to:
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milan.vaishnav@equityresearch.asia
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