Thursday, July 9, 2015

Daily Market Trend Guide -- Thursday, July 09, 2015

MARKET REPORT                                                                                  July 09, 2015
Chinese mess took toll on Indian Markets as well along with other Asian peers as the Markets remained corrective today ending with good amount of losses though the levels of 200-DMA has held out as support at close levels. The Markets saw a gap down opening on expected lines and traded with losses in the morning trade. The losses deepened in the afternoon trade as the Markets went on to form the day’s low of 8341.40 in the mid afternoon trade. Post opening of the European Markets, NIFTY did make an attempt to pullback and did manage to recover some part of its losses. However, the last half hour of the trade saw weakness returning again and took the Markets very near to its low point of the day. Markets finally settled the day at 8363.05, posting a net loss of 147.75 points while forming a lower top and lower bottom on the Daily Bar Charts.

MARKET TREND FOR THURSDAY, JULY 09, 2015
Markets are expected to open on a quiet and flat note and look for directions. Markets have taken support at its 200-DMA at close levels and are within its filter. Today’s session remains very critically important for the Markets and today’s behaviour of the Markets vis-à-vis the levels of 200-DMA would determine the trend for the immediate short term. Irrespective of the opening, it would be very important for the Markets to move past the levels of 200-DMA and trade above that.
For today, the levels of 8384 and 8475 are immediate resistance levels for the Markets. The supports come in at 8320 and 8250 levels.
The RSI—Relative Strength Index on the Daily Chart is 52.0088 and it has reached its lowest value in last 14-days which is bearish. Further, the RSI has set a fresh  14-day low but NIFTY has not yet. This is Bearish Divergence. However, the Daily MACD remains bullish as it trades above its signal line.
On the derivative front, NIFTY July futures have shed over 4.08 lakh shares or 2.19% in Open Interest. This signifies unwinding of the positions to some extent. The NIFTY PCR stands at 1.1 as against 1.14.
Looking at pattern analysis, the Markets have attempted to take support at its 200-DMA at Close levels. It has closed a notch below that but remains within its filter. It would be very critically important to see that the Markets moves past the levels of 200-DMA which is 8383 today. Failure to do so will induce some weakness in the near term for the Markets and will also put some question markets on the reversal that it has confirmed in the previous sessions and also make it vulnerable to test its 50-DMA which is 8270 levels.
All and all, though we are likely to see a quiet opening in the Markets, the behaviour of the Markets vis-à-vis 200-DMA would be critical to watch out for. It would be imperative for the Markets to maintain levels above 8383 and Close above that. Fresh purchases may be made but on very selective and in limited quantity. More liquidity should be maintained and provided for until the Markets take a directional bias above 200-DMA. Cautious 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

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