Thursday, July 14, 2016

Daily Market Trend Guide -- Wednesday, July 13, 2016

MARKET TREND FOR WEDNESDAY, JULY 13, 2016
The Markets traded pretty much on analyzed lines yesterday, did show some intraday corrective bout but finally ended the day with gains after pulling back in the second half. Today as well, we continue to set our analysis on similar lines. We can fairly expect the Markets to open on a flat to mildly positive note and look for directions. However, Markets has been showing some signs of weariness and it vulnerability to selling bouts from higher levels cannot be ruled out.

For today, the levels of 8530 and 8575 will act as immediate resistance levels for the Markets. The supports come in at 8480 and 8415 levels.

The RSI—Relative Strength Index on the Daily Chart is 70.6776 and it now trades in overbought territory. However, it has reached its highest value in last 14-days which is bullish. It does not show any bullish or bearish divergence. The Daily MACD is bullish as it trades above its signal line. On Candles a rising window occurred again. This usually implies continuation of bullish trend. There have been 10 rising windows in the last 50 Candles which portrays overall strong picture.

On the derivative front, the NIFTY July futures have added yet another over 13.13 lakh shares or 6.58% in Open Interest. This continues to display inherently bullish picture of the Markets.

Coming to pattern analysis front, as repeated often in our previous editions, the Markets have not only recovered all of its losses from the lows it made on June 24th but have went on to post a breakout while moving past its previous top. It has attempted a further breakout as a continuation of its uptrend after it consolidated for a couple of days. The uptrend is likely to continue today as well however the Markets have been showing some signs of weariness at higher levels.

Overall, it is important to note that the Markets are now overbought and the breadth has been little negative showing some signs of weariness. Also, it has reason over 250-odd points after breaking out from its previous top. All this point towards  some vulnerability of the Markets towards witnessing some profit taking bouts from higher levels. Since the undercurrent remains adamantly buoyant, such corrections / consolidation may remain very range bound we may not witness any significant damage. However, no every rise should be utilized more on protecting profits at higher levels. The defensives sectors and the laggards over previous week will continue to outperform.


Milan Vaishnav, CMT
Technical Analyst

Member: Market Technicians Association, (MTA), USA
Member: Association of Technical Market Analysts, (ATMA), INDIA

+91-98250-16331

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