Tuesday, August 2, 2016

Daily Market Trend Guide -- Tuesday, August 02, 2016

MARKET TREND FOR TUESDAY, AUGUST 02, 2016
The Markets traded mostly on analyzed lines yesterday as it expectedly witnessed a intraday selling bout as it came off over 100-odd points from the high point of the day to end on absolutely flat note. Today, we can fairly expect such consolidation to continue in the Markets. We can expect the Markets to start on a flat not and look for direction with the levels of 8590-8570 acting as pattern supports. The intraday trajectory that the Markets form would be critical to decide the trend for the day.

For today, the levels of 8700 and 8725 will act as immediate resistance levels for the Markets. The supports come in at 8590 and 8565 levels.

The RSI—Relative Strength Index on the Daily Chart is 65.9781 and it remains neutral as it shows no bullish or bearish divergence or any failure swings. The Daily MACD has turned bearish as it has reported a negative crossover and now trades below its signal line.

On the derivative front, the NIFTY August futures have added over 3.49 lakh shares or 1.58% in Open Interest. Some fresh shorts are being witnessed and the NIFTY PCR stands unchanged at 0.94 today.

Coming to pattern analysis, the Markets have continued to remain in the upward rising channel drawn from February lows. However, the ends of the channel are converging, i.e. getting narrower and therefore some decisive move by the Markets in coming days cannot be ruled out. Until now, the Markets have continued to take support on the lower rising end of the channel and the Markets will see the upward momentum so long as it continues to do so. Any breach below the levels of 8560-8550 will see the Markets weakening for the immediate short term.

Overall all, as of now, the primary trend of the Markets remain intact and any corrective activity is expected to remain restricted to intraday selling bouts like one that we witnessed yesterday or very limited downsides amidst range bound movements. However, also as mentioned in yesterday’s edition, the caution levels in the Markets remain at elevated levels and all existing profits should be guarded vigilantly at higher levels. Continuance of cautious outlook is advised on the Markets.


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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