Friday, July 31, 2015

Daily Market Trend Guide -- Friday, July 31, 2015

MARKET REPORT                                                                                 July 31, 2015
The Markets remained positive on its expiry day of the July series and held on to its important support at Close levels while ending the day with modest gains. The Markets saw itself opening above its both 100-DMA and 200-DMA and remained above those levels for the rest of the session. After opening on a better note, the Markets strengthened further and went on to form the day’s high of 8458.90 by afternoon trade. However, the second half of session saw some volatility creeping in on account of rollovers. The Markets came off from its highs and pared nearly half of its gains. The second half of the session was spent in a sideways manner and the Markets finally ended the day at 8421.80, posting a net gain of 46.75 points or 0.56% while forming a higher top and higher bottom on the Daily Bar Charts.


MARKET TREND FOR FRIDAY, JULY 31, 2015
Expect the Market to open today on a flat to mildly positive note and continue with its up move. The July series have ended on a positive note and it is likely that the Markets continue with it pullback at least in the initial trade. The Markets are once again above all of its DMAs and it would be important to see that the Markets trades above these levels in order to avoid any temporary weakness from creeping in.

For today, the levels of 8460 and 8510 will act as immediate resistance levels for the Markets. The supports come in at 8400 and 8340 levels.

The RSI—Relative Strength Index on the Daily Charts is 49.2633 and it remains neutral as it shows no bullish or bearish divergences or any failure swings. The Daily MACD continues to remain bearish as it trades below its signal line.

On the derivative front, rollovers remain in line wit the 3-month average in NIFTY and stocks alike. The NIFTY August series added over 39.87 lakh shares or 31.60% in Open Interest. The NIFTY PCR for August series stands at 0.85.

Coming to pattern analysis, the Markets have breached its lower support trend line of the channel that it had formed after making lows at 8000-levels. Having said this, though the Markets have managed to hang on to all of its DMAs  at Close levels, this very same trend line which is breached on the downside is likely to act as resistance going ahead. Though the Markets may continue with its pullback, this pattern is likely to pose resistance around 8500-8550 levels. It would be imperative for the Markets to move past these levels otherwise  we will again see the interruption in the uptrend around these levels.

Overall, the Markets may open with mild gains and continue it uptrend at least in the initial session and we will also continue to see selective stock and sector out performance. The levels of 8400 would be an important support and its breach can see the Markets going to 8340 levels. The behaviour of the Markets vis-à-vis the levels of 8400-levels would be crucial to watch out for. Select purchases may be made with high vigilance over protection of profits 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:
www.MyMoneyPlant.co.in
+91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

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